On June 1, 2019, James put a new automobile into service, which cost $40,000. The car is used 60% for business and 40% for personal use, a percentage that is assumed to remain constant over the vehicle's life. James does not elect to take additional first-year depreciation. Calculate the cost recovery deduction for 2019.

 To calculate the cost recovery deduction (also known as depreciation deduction) for the car James put into service on June 1, 2019, and used for business purposes, we will use the IRS's Modified Accelerated Cost Recovery System (MACRS) method for property placed in service in that tax year. As James does not elect to take an additional first-year depreciation, we will use the standard MACRS table for five-year property (as most cars are categorized under this recovery period).

Here's how to calculate the depreciation deduction for 2019:

Step 1: Determine the basis for depreciation. Since the car is used 60% for business, you multiply the total cost of the car by the percentage of business use: $40,000 (cost) * 60% (business use) = $24,000 (basis for depreciation)

Step 2: Under MACRS, a five-year property uses the 200% declining balance method over five years. The IRS provides a table with the percentages that apply for each year. For the first year for five-year property, the table specifies 20%.

Step 3: James must prorate the first-year depreciation based on the month the car was placed in service. For property placed in service in June, the first-year depreciation is actually 6/12 (half-year) of the full-year's depreciation rate. If we were using the full year, we would apply the full 20%, but James needs to calculate half of that because he begins using the car in June. 20% (first-year rate) * 50% (half-year convention) = 10%

Step 4: Apply the prorated depreciation rate to the basis: $24,000 (depreciable basis) * 10% (prorated first-year depreciation rate) = $2,400

So the cost recovery deduction for James's car for the tax year 2019 would be $2,400.