Author Question: In April of 2015, Brandon acquired five-year listed property (not an automobile) for $30,000 and ... (Read 42 times)

newbem · **on:** Sep 13, 2020

Question 1

In April 2016, Emma acquired a machine for $60,000 for use in her business. The machine is classified as 7-year property. Emma does not expense the asset under Sec. 179, and it is not eligible for bonus depreciation. Emma's depreciation on the machine this year is
◦ $30,000.
◦ $60,000.
◦ $6,428.
◦ $8,574.

Question 2

In April of 2015, Brandon acquired five-year listed property (not an automobile) for $30,000 and used it 70% for business. No election was made regarding Sec. 179 and bonus depreciation was not available. In 2016, his business use of the property dropped to 40%. Which of the following statements is true?
◦ The change does not affect Brandon's previous depreciation.
◦ Brandon must recapture $2,100 as ordinary income.
◦ Brandon must recapture $4,200 as ordinary income.
◦ Brandon must amend the previous tax return and recompute depreciation.

mohan · **Reply #1 on:** Sep 13, 2020

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