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.Bonus depreciation is not applied.The maximum depreciation deduction for the van is
A)$360.
B)$720.
C)$2,400.
D)$1,980.

Question

Quizplus · Accepted Answer

The maximum depreciation deduction is calculated by applying the business use percentage to the cost of the van and then using the MACRS depreciation method for 5-year property. Since bonus depreciation is not applied, the deduction is 20% of $12,000, which is $2,400, and then 30% business use is applied, resulting in $720. However, the question asks for the maximum deduction, which is limited to $360 due to the luxury auto limits for vehicles placed in service in 2023.

Enrico Is a Self-Employed Electrician