Exam 8: Depreciation, cost Recovery, amortization, and Depletion

A used $35,000 automobile that is used 100% for business is placed in service in 2017.If the automobile fails the 50% business usage test in the second year,no cost recovery will be recaptured.

James purchased a new business asset (three-year personalty) on July 23,2017,at a cost of $40,000.James takes additional first-year depreciation but does not elect Section 179 expense on the asset.Determine the cost recovery deduction for 2017.

Tan Company acquires a new machine (ten-year property) on January 15,2017,at a cost of $200,000.Tan also acquires another new machine (seven-year property) on November 5,2017,at a cost of $40,000.No election is made to use the straight-line method.The company does not make the § 179 election and elects to not take additional first-year depreciation.Determine the total deductions in calculating taxable income related to the machines for 2017.