In February 2019,Pietra acquired a new car costing $82,000.She used the car 80% in her sole proprietorship.Assuming Sec.179 is not elected,Pietra's maximum depreciation deduction allowable for the car will be
A)$65,600.
B)$13,120.
C)$14,480.
D)$8,080.

Question

Quizplus · Accepted Answer

The maximum depreciation deduction for the car is calculated as follows:
Firstly, determine the depreciable basis of the car:
$82,000 x 80% = $65,600
The depreciable basis is $65,600.
Secondly, determine the depreciation deduction using the Modified Accelerated Cost Recovery System (MACRS) table for 5-year property:
Year 1: 20% x $65,600 = $13,120
Year 2: 32% x $65,600 = $20,992
Year 3: 19.2% x $65,600 = $12,563.20
Year 4: 11.52% x $65,600 = $7,539.84
Year 5: 11.52% x $65,600 = $7,539.84
The maximum depreciation deduction allowable for the car is $14,480 in the first year.

In February 2019,Pietra Acquired a New Car Costing $82,000