Calculate Euclid’s cost recovery deduction for 2018 and 2019.

Euclid acquires a 7-year class asset on May 9, 2018 for $80,000. Euclid does not elect immediate expensing under § 179- She does not claim any available additional first-year depreciation. Calculate Euclid’s cost recovery deduction for 2018 and 2019.

Expert Solution

The IRS provides tables that specify cost recovery allowances for personalty and for realty. To determine the amount of the cost recovery allowances, simply identify the asset by class and go to the appropriate table for the percentage (Exhibit 8.3).

2018 $80,000 × .1429 = $11,432.
2019 $80,000 × .2449 = $19,592.

2018: $11,432
2019: $19,592

Renze Joy Candido answered 2 years ago

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