Reference no: EM132669608

On February 2, 2019, Katie purchased and placed in service a new $18,500 car. The car was used 65% for business, 5% for production of income, and 30% for personal use in 2019. In 2020, the usage changed to 40% for business, 15% for production of income, and 45% for personal use. Katie did elect immediate expensing under § 179. She elects to take additional first-year depreciation.
Assume the following luxury automobile limitations:

year 1: $10,000;

year 2: $16,000.

Problem a. The cost recovery deduction taken in 2019 was $._____

Problem b. The cost recovery deduction for 2020 is $.______

Problem c. The cost recovery recapture, if any, in 2020 is $.______