In 2014, Tamika, a self-employed CPA and calendar-year taxpayer, purchased and p

Question

In 2014, Tamika, a self-employed CPA and calendar-year taxpayer, purchased and placed in service a car and a personal computer. Both assets are "listed property" and are subject to the special rules contained in IRC Sec. 280F. Both assets are 5-year MACRS property. The following information regarding each asset is presented below: Asset Date Acquired Acquisition Cost Business Usage Sec. 179 Election Car 1/2/14 $21,000 60% No Computer 7/1/14 $4,000 40% No For each asset, calculate the MACRS 2014 depreciation deduction, assuming that Tamika does not elect the Sec. 179 expensing option.

Explanation / Answer

The answer is as follows:

The depreciation should be calculated on the usage of the asset in the business portion and under MACRS depreciation table for 1st year the depreciation rate is 20%.

Asset Purchase date Acquired Acquisition cost Usage Usage in business Depreciation @20%. Car 1/2/2014 21000 60% 12600 2520 Computer 7/1/2014 4000 40% 1600 320 2840

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