Question

Casper used the following assets in his Schedule C trade or business in the tax year 2018. Casper is a new client and unfortunately does not have a copy of his prior year's tax return. He recalls that all of the assets purchased in prior years used MACRS depreciation (no §179 expense or bonus). Casper does not wish to take §179 or bonus depreciation. (Use Table 6A-1 and Table 6A-8) Calculate the current year depreciation allowance for Casper’s business. (Round your final answers to the nearest whole dollar amount.)

I need an explanation on how to find the Auto amount, please show work so i can learn!

Asset Date Sold 05/15/2018 Computer 1 Computer 2 Printer Computer 3 Equipment Auto Furniture 1 Furniture 2 Office Bldg. $ Date Purchased 03/12/2015 05/05/2015 08/25/2018 05/25/2018 03/20/2016 05/01/2018 02/12/2016 08/15/2016 04/01/2018 Business Use 100% 100% 100% 100% 100% 90% 100% 100% 100% $ $ $ $ $ $ $ $ $ Cost Method 2,400 5yr MACRS 2,700 5yr MACRS 2,000 5yr MACRS 2,900 5yr MACRS 2,400 7yr MACRS 20,600 5yr MACRS 23,100 7yr MACRS 3,300 7yr MACRS 297,000 39 SL 2018 Expense $ 276 $ 156 400 $ 580 420 08/25/2018 2,020 $ 5 577 5,402

Answer 1

Auto

Maximum allowances for luxury auto placed in service in 2018 is $10,000 for the first year and 90% is used for business, the proportionate allowance will be 10000*90% = $9000