Answer to Question #43366 in Economics of Enterprise for Seth Morgan

Question

Audra acquires the following new five-year class property in 2011:

Asset Acquisition Date Cost
A January 10 $106,000
B July 5 $70,000
C November 15 $250,000
Total $426,000

Audra elects § 179 for Asset C. Audra's taxable income from her business would not create a limitation for purposes of the § 179 deduction. If Congress reenacts additional first-year depreciation for 2010, Audra elects not to take additional first-year depreciation. Determine her total cost recovery deduction (including the § 179 deduction) for the year.

Answer 1

Her total cost recovery deduction (including the $179,000 deduction) for the year will be
Cost =$426,000 + $179,000 = $605,000