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Adjusted Cost Basis Calculation

  • Cost basis times business use percentage equals Business portion cost basis
  • Business portion cost basis less Section 179 deduction equals Adjusted cost basis
  • Adjusted cost basis times 30% Special bonus depreciation equals Special bonus depreciation amount
  • Adjusted cost basis less 30% bonus depreciation amount equals Adjusted cost basis to use for current and future year depreciation calculations

Example:

$21,814 cost basis * 90% business use = $19,633 business portion cost basis
$19,633 - Section 179 Deduction $10,000 = $9,633 Adjusted cost basis
$9,633 * 30% bonus special depreciation allowance = $2,890 bonus depreciation amount
$9,633 - $2,890 = $6,743 new cost basis for depreciation calculations for current year and future years

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