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3 March, 14:24

Alice purchased office furniture on September 20, 2016, for $100,000. On October 10, 2016, she purchased business computers for $80,000. Alice placed all of the assets in service on January 15, 2017. Alice did not elect to expense any of the assets under § 179, did not elect straight-line cost recovery, and did not take additional first-year depreciation. Determine the cost recovery deduction for the business assets for 2017.

a. $6,426

b. $14,710

c. $25,722

d. $30,290

e. None of the above

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  1. 3 March, 14:36
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    d. $30,290

    Explanation:

    The half-year convention applies.

    Regular MACRS

    Furniture (seven-year property) = $100,000 * 0.1429

    = $14,290

    Computers (five-year property) = $80,000 * 0.20

    = $16,000

    Total cost recovery = $14,290 + $16,000

    = $30,290

    Therefore, The cost recovery deduction for the business assets for 2017 is $30,290.
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