Augie Purchased One New Asset During the Year (Five-Year Property)

question 9

Multiple Choice

Augie purchased one new asset during the year (five-year property) on November 10, 2019, at a cost of $660,000. She would like to use the § 179 election and will also take additional first-year depreciation.The income from the business before the cost recovery deduction and the § 179 deduction was $600,000.Determine the maximum cost recovery deduction available on this asset for 2019.

• A)$30,500
• B)$580,200
• C)$600,000
• D)$660,000

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Definitions:

Compounded Monthly

Describes the process in which interest earnings are calculated on both the initial principal and the accumulated interest from previous periods, recalculated every month.

Monthly Payment

An amount paid every month, often related to loans or financial agreements like mortgages.

Compounded Monthly

Interest on an investment or loan calculated and added to the balance monthly, leading to interest on interest.

Amortized

Describes a loan or mortgage with scheduled periodic payments that cover both interest and principle over a certain time period.