​An Asset (Not an Automobile) Put in Service in June

question 18

Multiple Choice

​An asset (not an automobile) put in service in June 2015 has a depreciable basis of $2,035,000 and a recovery period of 5 years. Assuming bonus depreciation is extended into 2015, a half-year convention, and the expensing election is made for the maximum eligible amount, what is the maximum amount of cost that can be deducted in 2015 assuming the business earned taxable income of $1,000,000 before deducting any cost recovery?

• A)​$407,000
• B)​$500,000
• C)​$1,000,000
• D)​$1,407,000
• E)​$2,000,000

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Definitions:

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord.

Depressant

A substance that reduces the activity of the central nervous system, often used to induce calmness or sleep.

Substance Use Disorder

A state where consuming one or more substances results in significant clinical impairment or distress.

Binge Drinking

A pattern of alcohol consumption in which a person consumes five or more drinks on a single occasion.