Barry Purchased a Used Business Asset (Seven-Year Property) on September

question 46

Multiple Choice

Barry purchased a used business asset (seven-year property) on September 30, 2018, at a cost of $200,000. This is the only asset he purchased during the year. Barry did not elect to expense any of the asset under § 179, did not take additional first-year depreciation, and did not elect straight-line cost recovery. Barry sold the asset on July 17, 2019. Determine the cost recovery deduction for 2019.

• A) $19,133
• B) $24,490
• C) $34,438
• D) $55,100
• E) None of the above

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Definitions:

Flood Control System

A flood control system consists of structures and measures implemented to manage and regulate water flow to prevent or mitigate the effects of flooding in vulnerable areas.

Insurer

An entity which provides insurance is responsible for compensating its clients against losses from certain specified risks.

Principal-Agent Problem

A dilemma in economics where one party (the agent) is able to make decisions that impact another party (the principal), potentially leading to conflicts of interest.

Ownership

The act, state, or right of possessing something.