Potomac LLC purchased an automobile for $30,000 on August 5, 2018. What is Potomac's depreciation expense for 2018 (ignore any possible bonus depreciation)? (Use MACRS Table 1, and Exhibit 10-10)
A) $10,000.
B) $4,287.
C) $6,000.
D) $30,000.
E) None of the choices are correct.

Question

Potomac LLC purchased an automobile for $30,000 on August 5, 2018. What is Potomac's depreciation expense for 2018 (ignore any possible bonus depreciation)? (Use MACRS Table 1, and Exhibit 10-10)
A) $10,000.
B) $4,287.
C) $6,000.
D) $30,000.
E) None of the choices are correct.

Quizplus · Accepted Answer

A luxury auto's maximum depreciation in the first year is the lesser of $10,000 or its MACRS amount of $6,000 ($30,000 × 20 percent) for 2018.

Potomac LLC Purchased an Automobile for $30,000 on August 5