Determine the cost recovery deduction for 2013

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Fern Company acquires a new machine (seven-year property) on January 10, 2013, at a cost of $600,000. Fern makes the election to not take additional first-year depreciation, and elects to expense the maximum amount under § 179. No election is made to use the straight-line method. Determine the total deductions in calculating taxable income related to the machine for 2013 assuming Fern has taxable income of $700,000.

On June 1, 2012, Josh purchased a used automobile that cost $24,000. The car is used 60% for business and 40% for personal use. (Assume this percentage is maintained for the life of the car.) Determine the cost recovery deduction for 2013.

Reference no: EM13215866

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