​An Asset (Not an Automobile) Put in Service in June

question 16

Multiple Choice

​An asset (not an automobile) put in service in June 2016 has a depreciable basis of $35,000 and a recovery period of 5 years and is the only asset placed in service this 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 2016 (assume no income limitation) ?

• A)​$7,000
• B)​$17,500
• C)​$21,000
• D)​$24,400
• E)​$35,000

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Definitions:

Non-necessary Item

A product or service considered not essential for basic living and daily function.

Coat

An outer garment worn outdoors, providing protection from the weather or for fashion purposes; not related to specific legal or financial terminology.

Agent of Necessity

A person who is appointed to act on behalf of another in situations of urgent necessity, without prior authorization from the principal.

Extravagance

The act or habit of spending more money than is necessary or wise; often associated with lavish or luxurious expenditure.