Juan, a sole proprietor, acquires a new 5-year class asset on march 14, 2019, for $200,000. this is the only asset juan acquired during the year. he does not elect immediate expensing under section 179. juan does not claim any available additional first-year depreciation. on july 15, 2020, juan sells the asset a. determine juan’s cost recovery for 2019 b. determine juan’s cost recovery for 2020.

The answers are:

A) $40,000

B) $32,000

Explanation:

Juan's recovery cost for 2019 can be calculated by multiplying the total asset cost by 20%: $200,000 x 20% = $40,000

Juan's recovery cost for 2020 can be calculated by multiplying the total asset cost by 32% and then divide it by 2: ($200,000 x 32%) / 2 = $32,000

answer; a large down payment,a longer term loan, would result in a lower monthly payment;