a. Rex uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table.
On July 1, 2015, Rex purchases a new automobile for $40,000. He uses the car 80% for business and drives the car as follows: 8,000 miles in 2015, 19,000 miles in 2016, 20,000 miles in 2017, and 15,000 miles in 2018.
Determine Rex's basis in the business portion of the auto as of January 1, 2019, under the following assumptions:
If required, round answers to the nearest dollar.
a. Rex uses the automatic mileage method.
Compute his basis adjustments for
2015: $fill in the blank 7c768af94f81f83_1
2016: $fill in the blank 7c768af94f81f83_2
2017: $fill in the blank 7c768af94f81f83_3
2018: $fill in the blank 7c768af94f81f83_4
Rex's adjusted basis in the auto on January 1, 2019, is $fill in the blank 7c768af94f81f83_5.
b. Rex 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. The recovery limitation for an auto placed in service in 2015 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year), and $1,875 (fourth year).]
Compute his depreciation deductions for year. Click here to access the depreciation table.
2015: $fill in the blank d8f09000dfcf035_1
2016: $fill in the blank d8f09000dfcf035_2
2017: $fill in the blank d8f09000dfcf035_3
2018: $fill in the blank d8f09000dfcf035_4
Rex's adjusted basis in the auto on January 1, 2019, is $fill in the blank d8f09000dfcf035_5.
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