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

question 83

Multiple Choice

​An asset (not an automobile) placed in service in June 2016 has a depreciable basis of $2,035,000, 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 for the maximum eligible amount, what is the amount of cost that can be deducted in 2016 assuming the business earned taxable income of $1,000,000 before deducting any cost recovery?

• A)​$407,000
• B)​$500,000
• C)​$1,000,000
• D)​$1,407,000
• E)​$2,000,000

---

Definitions:

Forecast

The process of making predictions based on past and present data trends, commonly used in weather, economic, and business planning contexts.

Population

The entire group of individuals or items that is the subject of a statistical study.

Sampling

the process of selecting a subset of individuals from a population to estimate characteristics of the whole population.

Service Department

A division within a company that provides support services to the company's main operations, such as IT, maintenance, or human resources.