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

question 2

Multiple Choice

Augie purchased one new asset during the year (five-year property) on November 10,2016,at a cost of $650,000.She would like to use the § 179 election and will also take additional first-year depreciation,if available.The income from the business before the cost recovery deduction and the § 179 deduction was $600,000.Determine the total cost recovery deduction with respect to the asset for 2016.

• A)$22,500
• B)$154,550
• C)$500,000
• D)$600,700
• E)None of the above

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Definitions:

Toothbrushes

Oral hygiene instruments consisting of a small brush on a handle used to clean teeth.

Acquires

Acquires pertains to obtaining ownership or control of something, often referring to companies taking over other businesses.

Manufacturer

A company or individual engaged in the production of goods for sale using raw materials and components.

Frozen Yogurt

A frozen dessert made with yogurt and sometimes other dairy products, often served as an alternative to ice cream.