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On June 1, 2019, James places in service a new automobile that cost $40,000. The car is used 60% for business and 40% for personal use. (Assume this percentage is maintained for the life of the car.) James does not take additional first-year depreciation. Determine the cost recovery deduction for 2019.

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tanseershar

Answer:

The answer is given below;

Explanation:

As per Section 179 of IRS ,the maximum cost recovery shall be $25,000 for the vehicle if the vehicle is used more than 50% for business and its weight is between 6,000 pounds GVWR and 14,000 pounds GVWR.

We assume that weight of vehicle is between 6,000-14,000 pounds and the vehicle is 60% used in business. Further the vehicle is in service before 31 December 2019.Therefore the cost recovery deduction shall be $25,000 in 2019

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