Kiri acquires equipment (7-year property) on August 14, 2018, for $80,000. She does not elect to expense the asset under Section 179 or the 100% bonus. She sells the asset on January 15, 2022. a. What is Kiri's cost recovery deduction related to the equipment in 2018 and 2022? b. What is Kiri's cost recovery deduction related to the equipment in 2018 and 2022 if the 100% bonus is elected?
What will be an ideal response?
a. 2018- $80,000 × .1429 = $11,432 7-yr MACRS first year.
2022 - $80,000 × .0893 × ½ = $3,572 7-yr MACRS fifth year.
b. 2018- $80,000 × 100%=$80,000 first year.
2022 - $0.
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