Miles converted a machine from personal use to rental property on July 1 of the current year. At the time of the conversion, the machine was worth $90,000. Miles purchased the machine for $120,000 five years ago. What is the basis of the machine for cost recovery?

1. $70,000

2. $90,000

3. $120,000

4. $140,000

Craig purchased a new business asset (three-year personalty) on June 18, 2020, at a cost of $70,000. James takes additional first-year depreciation but does not elect Section 179 expense on the asset. Determine the cost recovery deduction for 2019.

1. $8,333

2. $45,566

3. $35,000

4. $70,000