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Hazel purchased a new business asset (five-year asset) on September 30, 2019, at a cost of $100,000. On October 4, 2019, she placed the asset in service. This was the only asset she placed in service in 2019. Hazel did not elect § 179 or additional first-year depreciation. On August 20, 2020, Hazel sold the asset. Determine the cost recovery for 2020 for the asset.

Respuesta :

Answer:

cost recovery = $23750

Explanation:

given data

cost = $100,000

to find out

cost recovery

solution

we know here value of asset in last quarter October is given $10000

and % of MACRS rate according to mid quarter for 4th quarter is 38%

so

cost recovery will be

cost recovery = 100000 × 38% × [tex]\frac{2.5}{4}[/tex]

cost recovery = $23750

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