A)Leon purchased a new car on August 1, 2016 for $14,500. His records indicate t

Question

A)Leon purchased a new car on August 1, 2016 for $14,500. His
records indicate that he uses the car 45 percent for business and 55
percent for personal use. What are his cost recovery deductions for
2016 and 2017?
a. $653; $1,305
b. $1,377; $2,205
c. $1,305; $2,088
d. $798; $1,595   

B)NicKman Corporation had income from operations of $29,000. What
is the corporation’s taxable income including the following property
transactions: Gain on investment stock = $8,000; loss on machinery
held three years = $6,000; $4,000 loss on equipment held 10
months; $4,000 gain on land used for six years for storage of trucks.
What is Orange’s Corporation's taxable income?
a. $33,000
b. $27,000
c. $31,000
d. $25,000

Explanation / Answer

Ans: (a)

Explanation:

($14,500 x .1 x .45) = 653

($14,500 x .2 x .45) = 1305

The car is not used more than 50% for business, Here Sec . 179 expensing or bonus depreciation and ADS must be used.

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