Taylor LLC purchased an automobile for $55,000 on July 5, 2018. What is Taylor's maximum depreciation expense for 2018 if its business use percentage is 100 percent?

Question

Quizplus · Accepted Answer

A luxury auto's maximum depreciation in the first year is the lesser of $10,000 or its MACRS amount of $11,000 ($55,000 × 20%). However, the limitation is increased by $8,000 when bonus depreciation is taken. Taylor's maximum depreciation on the automobile is $18,000 ($10,000 limitation + $8,000 bonus).

Taylor LLC Purchased an Automobile for $55,000 on July 5