Bonnie Jo purchased a used camera (five-year property)for use in her sole proprietorship. The basis of the camera was $4,400. Bonnie Jo used the camera in her business 70 percent of the time and used it for personal purposes the rest of the time during the first year. Calculate Bonnie Jo's depreciation deduction during the first year, assuming the sole proprietorship had a loss during the year. (Bonnie did not place the property in service in the last quarter.)(Use MACRS Table 1.)
A)$440
B)$616
C)$880
D)$4,400
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The MACRS depreciation rate for five-year property in the first year is 20%. Since Bonnie Jo used the camera 70% for business, the depreciation deduction is $4,400 x 20% x 70% = $616.

Bonnie Jo Purchased a Used Camera (Five-Year Property)for Use in Her