Enrico is a self-employed electrician.In May of the current year,Enrico acquired a used van (5-year property)for $12,000.He used the van 30% for business.The maximum depreciation deduction for is
A)$360.
B)$720.
C)$2,400.
D)$1,980.

Question

Quizplus · Accepted Answer

The maximum depreciation deduction is calculated by taking the cost of the van ($12,000) and multiplying it by the business use percentage (30%), then applying the applicable depreciation rate for 5-year property. However, since the business use is less than 50%, Enrico must use the straight-line method under the Alternative Depreciation System (ADS). The deduction is $12,000 x 30% x 20% (ADS rate for 5-year property) = $720. However, the maximum deduction is limited to $360 due to the business use percentage.

Enrico Is a Self-Employed Electrician