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ABC company acquires and places in service two assets in March 2020: a forklift (7-year class...

ABC company acquires and places in service two assets in March 2020: a forklift (7-year class asset) at a cost of 5000, and a truck (5-year class asset) at a cost of $12000. What is ABC's cost recovery deduction in 2020? Assume ABC is a calendar year taxpayer and does not take Sec.179 expense or first-year bonus depreciation.

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Expert Solution

Solution:

Total Cost Recovery Deduction in 2020 $          3,114.50

Working:

Asset Useful Life Original Basis Sec. 179 Expense Remaining Basis Rate Depreciation
forklift 7 $             5,000 $-   $                   5,000 14.2900% $              714.50
truck 5 $           12,000 $-   $                 12,000 20.0000% $          2,400.00
Total Cost Recovery Deduction in 2020 $          3,114.50

ekkarill92 answered 1 year ago
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