Question

On June 17, 2018, Donald purchased a passenger automobile at a cost of $56,000. The automobile is used 90 percent for qualified business use and 10 percent for personal purposes. Click here to access the depreciation table and click here to access the annual automobile depreciation limitations. Calculate the depreciation expense (without bonus depreciation) for the automobile for 2018, assuming half-year convention and no Section 179 immediate expensing

Answer 1

Calculation of Depreciation expense (withoud bonus deprecitaion) for automobile for 2018:

The depreciation limits for passenger automobiles acquired by the taxpayer after Sept. 27, 2017, and placed in service by the taxpayer during calendar year 2018 are:

… $18,000 for the placed in service year;

… $16,000 for the second tax year;

… $9,600 for the third tax year; and

… $5,760 for each succeeding year.

Therefore $9000 (considering half year convention) is the depreciation amount for the passenger automobile.

Since donald use this automobile 90% for its business purpose, it can claim deprecation expenses of $8100 (90% of $9000).