On July 15, 2009, Travis purchased some office furniture for $20,000 to be used in his business. He did not elect to expense the equipment under §179 or bonus. On December 15, 2011, he sells the equipment. What is his cost recovery deduction for 2011?



A. $0


B. $1,749

c. $3,498

is it B

Yes..B is the correct answer as you need to divide the percentage by 2 to arrive at the correct answer. If you had take the full percentage you have arrived at C, which is incorrect.

To calculate Travis's cost recovery deduction for 2011, we need to determine the depreciable basis of the equipment and the appropriate recovery period.

First, let's calculate the depreciable basis of the equipment:
Travis purchased the office furniture for $20,000.

Next, we need to determine the appropriate recovery period. According to the IRS guidelines, office furniture falls under the General Depreciation System (GDS) and has a recovery period of 7 years.

Now that we have all the necessary information, we can calculate the depreciation expense for 2011:
Depreciation expense = (Depreciable basis / Recovery Period)
= ($20,000 / 7)
= $2,857.14

However, since Travis sold the equipment on December 15, 2011, he can only take a partial year depreciation deduction. To calculate this, we need to determine the number of months the equipment was owned in 2011.

The equipment was owned for the entire year in 2011, which means Travis can take a full year depreciation deduction.

Therefore, Travis's cost recovery deduction for 2011 is $2,857.14.

Based on this calculation, the correct answer is not B. It should be $2,857.14.