Arlington LLC purchased an automobile for $71,000 on July 5, 2020. What is Arlington's depreciation deduction for 2020 if its business-use percentage is 70 percent? (Ignore any possible bonus depreciation.)(Use Exhibit 10-10.)
A)$5,450
B)$7,100
C)$7,070
D)$10,650
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

To calculate depreciation deduction for 2020, we need to use MACRS depreciation method:
- The automobile is a 5-year property
- The applicable MACRS percentage for year 1 is 22% (from Exhibit 10-10)

Therefore, the depreciation deduction for 2020 is:
$71,000 x 22% x 70% = $10,649.60

Rounding to the nearest dollar gives us answer C: $7,070

Arlington LLC Purchased an Automobile for $71,000 on July 5