Hazel purchased a new business asset (five-year property) on November 30, 2017, at a cost of...

Hazel purchased a new business asset (five-year property) on November 30, 2017, at a cost of $100,000. This was the only asset acquired by Hazel during 2017. On January 7, 2018, Hazel place the asset in service. She did not elect to expense any of the asset cost under 179, nor did she elect straight-line cost recovery. On October 25, 2019, Hazel sold the asset. Determine the cost recovery for 2017, 2018 and 2019.

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Expert Solution

Statement showing Cost recovery of Asset for 2017,2018,2019
	Calculation			=		End of Year Amount
Year	Beginning Boook value	X	Depericaition rate		Deperication expense	Accumulated depericiation	Book value ( Cost of Asset-Accum deperication
2017	$ 100,000		0.400		$ 40,000	$ 40,000	$ 60,000
2018	$ 60,000		0.400		$ 24,000	$ 64,000	$ 36,000
2019	$ 36,000		0.400		$ 14,400	$ 78,400	$ 21,600

	Depreciation rate	=	20/200%=40%

ekkarill92 answered 1 year ago

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