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

question 55

Multiple Choice

Augie purchased one new asset during the year (five-year property) on November 10,2015,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 2015.

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

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Definitions:

Negotiated

describes the process of discussing and arriving at a mutual agreement between parties, often relating to contracts or financial instruments.

Indorse

To formally support or approve, often used in the context of endorsing a check or bill of exchange.

Shopkeeper

An individual who owns or operates a small retail business.

Groceries

Items of food sold in a grocery store, including fresh produce, meats, dairy, and dry goods.