In May 2012,Stephen acquired a used automobile for $12,000 and used the automobile 75% for business.No Sec.179 election was made.In 2013,Stephen's business use of the automobile decreases to 45%.As a result of this change in business use:
A)The change does not affect the way Stephen computes his 2013 depreciation
B)Stephen's depreciation in 2013 is $2,250.
C)Stephen must recapture $900 as ordinary income in 2013
D)Stephen must amend the 2013 tax return and recompute depreciation.

Question

Quizplus · Accepted Answer

Stephen must recapture $900 as ordinary income in 2013 because the business use of the automobile dropped below 50%, triggering a recapture of excess depreciation.

In May 2012,Stephen Acquired a Used Automobile for $12,000 and Used