An Asset (Not an Automobile)put in Service in June 2018

question 109

Multiple Choice

An asset (not an automobile) put in service in June 2018 has a depreciable basis of $1,035,000, a recovery period of 5 years, and is the only asset placed in service during the year.Assuming bonus depreciation is used, a half-year convention, and the expensing election is made, what is the maximum amount of cost that can be deducted in 2018 (assume no income limitation) ?

• A)$207,000
• B)$500,000
• C)$1,017,500
• D)$1,000,000
• E)$1,035,000

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Definitions:

Income

The money received by an individual or group for work, from investments, or from other sources, often used as an indicator of economic standing.

Marginal Tax Rate

The percentage of tax applied to your next dollar of income, indicating the tax bracket rate for each additional dollar earned.

Average Tax Rate

The proportion of total income that is paid as taxes, calculated by dividing the total taxes paid by the total income.

Alcohol Tax

A special tax imposed on alcoholic beverages to generate revenue and/or discourage excessive consumption owing to health or social reasons.