Audra Acquires the Following New Five-Year Class Property in 2019

question 22

Essay

Audra acquires the following new five-year class property in 2019: $$\begin{array} { l l r } \text { Asset } & \text { Acquisition Date } & \text { Cost } \\\text { A } & \text { January 10 } & \$ 106,000 \\\text { B } & \text { July } 5 & 70,000 \\\text { C } & \text { November 15 } & \underline { 1,950,000 } \\\text { Total } & & \$ 2,126,000 \\\end{array}$$ Audra elects § 179 treatment for Asset C. Her taxable income from her business would not create a limitation for purposes of the § 179 deduction. Audra does not claim any available additional first-year depreciation deduction. Determine her total cost recovery deduction (including the § 179 deduction) for the year.

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Definitions:

State Charter

A legal document granting a municipality the authority to operate in certain ways, essentially the municipal version of a constitution.

Double Taxation

The imposition of taxes on the same income, asset, or financial transaction at two different levels of government or in two different countries.

Corporate Income

The total income or earnings generated by a corporation, before deductions such as expenses, taxes, and interest.

Distal Convoluted Tubule

A tubular segment of the nephron in the kidney involved in the reabsorption of water, sodium, and chloride, and thereby contributing to urine formation.