Question

47. LO.2, 3, 4 On March 15, 2019, Helen purchased and placed in service a new Esca- lade. The purchase price was $62,000, and the vehicle had a rating of 6,500 GVW. The vehicle was used 100% for business. a. Assuming that Helen does not use additional first-year depreciation, calculate the total depreciation deduction that she can take on the vehicle for 2019. b. What would your answer be if Helen decided to take additional first-year depreciation?

Answer 1

Requirement a New escalade was purchased and placed in service on Mar. 15, 2019 is not considered as a passanger automobile ans it is not subject to the luxury auto cost recovery limitations, as it's GVW rating is more than 6,000 pounds. But wht escalade is an SUV with a GVW between 6,000 pounds and 14,000 pounds. Thus the $ 179 expense amount is limited to $25,500 in the year 2019. $ 179 expense Add: MACRS cost reccovery (62,000-25,500)x0.20) Total deduction $ 25,500 7,300 $ 32.800 Requirement b Total depreciation deduction would be $62,000, if Helen decide to take additional 1st year depreciation.