Kelly buys a new Lexus for $48,750 in the current year to use in her commercial real estate business. Kelly cannot deduct the cost of the automobile in the current year, because
A)it is unreasonable in amount.
B)it is not a regularly recurring item.
C)it is a capital expenditure.
D)it is not necessary

Question

Quizplus · Accepted Answer

The cost of the automobile is considered a capital expenditure and therefore cannot be deducted in the current year. Instead, Kelly will deduct the cost through depreciation over the useful life of the vehicle.

Kelly Buys a New Lexus for $48,750 in the Current