need help with this question. It concerns 2015 Federal income Tax. Moving to ano

Question

need help with this question. It concerns 2015 Federal income Tax.

Moving to another question will save this response Bonnie purchased a new business asset (five-year property) on March 10. 2015. at a cost of dollar20,000. She also purchased a new business asset (seven-year property) on June 20. 2015. at a cost of dollar13,000. Bonnie did not elect to expense either of the assets under S179. nor did she elect straight-line cost recovery. Determine the cost recovery deduction for 2015 for these assets [including first year additional (bonus) depreciation]. Dollar5.858. Dollar7.464. Dollar9.586. Dollar19.429.

Explanation / Answer

MACRS depreciation as per federal tax laws basis Dep % Basis * Dep% Bonus deprecaition on five year property Total depreciation Five year property 20000 20% 4000 8000 12000 Seven Year property 13000 14.29% 1858 5571 7429 Ans D 19429 Bonus depreciation is calculated on cost of assets (20000-4000)*50% 8000 Bonus depreciation is calculated on cost of assets (13000-1858)*50% 5571

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