On may 2, 2019, karen placed in service a new sports utility vehicle that cost $60,000 and has a gross vehicle weight of 6,300 lbs. the vehicle is used 60% for business and 40% for personal use. determine karen's total cost recovery for 2019. karen wants to use both §179 and additional first-year depreciation.

Total Cost of Recovery = $27200

Explanation:

Cost of business Use = 60%*60000 = $36000

As per section 179

Depreciation capped at $25,000 for SUVs, trucks, and vans with a gross vehicle weight rating of more than 6,000

Depreciation = $25000

As per MACRS

Additional First-year depreciation = (36000-25000)*0.20 = $2200

Total Cost of Recovery = $25000+$2200 = $27200

since the options are not listed, when you are working on your budget you should also add water, tv, internet, miscellaneous and your 'fun' money for in your budget. when budgeting, you need to allow for fun money, and mis/accidental money so that you stick to the budget and not go crazy because you feel strapped to the budget.

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