Compute her basis adjustments for depreciation for each year

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Question

On April 1, 2014, Antoinette purchases a new automobile for $56,000. She uses the car 90% for business and drives the car as follows: 18,000 miles in 2014, 23,000 miles in 2015, 26,000 miles in 2016, and 21,000 miles in 2017. Antoinette is self-employed.

Determine Antoinette's basis in the business portion of the auto as of January 1, 2018, under the following assumptions:

If required, carry out computations to two decimal places and then round your final answer to the nearest dollar.

a. Antoinette uses the automatic mileage method.

Compute her basis adjustments for depreciation for each year.

2014: $______

2015: $______

2016: $______

2017: $______

Antoinette's adjusted basis in the auto on January 1, 2018, is $_______

b. Antoinette uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. Assume the recovery limitation for 2014 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year) and $1,875 (fourth year).]

Compute her depreciation deductions for year.

2014: $_______

2015: $_______

2016: $_______

2017: $_______

Antoinette's adjusted basis in the auto on January 1, 2018, is $________

Reference no: EM132321676

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