Calculate Hamlet’s cost recovery deductions for 2018 and 2019.

Hamlet acquires a 7-year class asset on November 23, 2018, for $100,000. Hamlet does not elect immediate expensing under § 179- He does not claim any available additional first-year depreciation. Calculate Hamlet’s cost recovery deductions for 2018 and 2019.

Expert Solution

The mid-quarter convention applies if more than 40% of the value of property other than eligible real estate is placed in service during the last quarter of the year. Hamlet acquired 100% of assets in the last quarter of the year. Therefore, the mid-quarter convention applies (Exhibit 8.4).

2018 $100,000 × .0357 = $3,570.
2019 $100,000 × .2755 = $27,550.

2018: $3,570
2019: $27,550

Renze Joy Candido answered 2 years ago

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