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 80% for business and 20% for personal purposes.Enrico does not apply Sec.179 or bonus depreciation.The maximum depreciation deduction for the van is
A)$1,200.
B)$2,400.
C)$6,720.
D)$1,920.

Question

Quizplus · Accepted Answer

The van is used 80% for business, so only 80% of the cost is depreciable. The van is a 5-year property, and using the MACRS depreciation method, the first-year depreciation rate is 20%. Therefore, $12,000 x 80% x 20% = $1,920.

Enrico Is a Self-Employed Electrician