An Asset (Not an Automobile)put in Service in June 2017

question 29

Multiple Choice

An asset (not an automobile) put in service in June 2017 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 2017 (assume no income limitation) ?

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

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Definitions:

Loan

A sum of money that is borrowed and expected to be paid back with interest.

Compounded Semi-annually

Interest that is calculated and added to the principal twice a year.

Semi-annual Payments

Payments made twice a year as a part of a financial agreement or loan.

Loan

Borrowed money that is expected to be paid back with interest.