Question

Problem 8-47 (LO. 2, 3, 4) On March 15, 2019, Helen purchased and placed in service a new Escalade. The purchase price of the automobile was $62,000, and the vehicle had a rating of 6,500 GVW. The vehicle was used 100% for business. If required, round your answers to the nearest dollar. Click here to access the depreciation table to use for this problem. 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. Section $ 179 expense MACRS cost recovery Total deduction b. What is her total depreciation deduction if Helen decided to take additional first-year depreciation?

Answer 1

Requirement a Section 5179 expense MACRS Cost recovery [(62,000-25,500) x0. 20] Total deduction $25,500 $7,300 $ 32,800 Escalade is not treated as passanger automobile, because its GVW rating exceeds 6,000 pounds. Thus is not subjecct to luxury auto recovery limitations. However, the vehicle is an SUV with a GVW rating between 6000 to 14,000 pounds, the 5179 expense Requirement Total depreciation deduction $62,000. Since, Helen elects to use bonus depreciation on the sUv, full cost of $62,000 would be reccovered in 2019.