Explain how cathy will compute depreciation deductions

Reference no: EM133354165

Question: In January of Year 1, Cathy purchased a passenger automobile for $50,000 for use in her private accounting practice. She uses the automobile on evenings and weekends to travel from her home to meetings with clients in her private accounting practice, and to travel from one client meeting to another. She also sometimes uses the automobile to commute to her work at XYZ. Cathy estimates that, in Year 1, 20% of her use of the automobile was related to her commuting to XYZ and the balance was related to work in her private accounting practice
(a) Explain how Cathy will compute depreciation deductions on the automobile for Year 1. May Cathy elect to expense part or all of the automobile using §179? Will the §168 (or §179) deductions claimed by Cathy impact Cathy's home office deductions in Problem 2
(b) What result if in Year 2 Cathy uses the automobile 30% of the time in the private accounting practice and uses it 70% of the time to commute to XYZ?

Reference no: EM133354165

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