On July 1, 2020, Brent purchases a new automobile for $40,000. He uses the car 86% for business and drives the car for business purposes as follows: 7,000 miles in 2020, 17,500 miles in 2021, 19,600 miles in 2022, and 14,000 miles in 2023. Determine Brent's basis in the business portion of the auto as of January 1, 2024, under the following assumptions: If required, round your computations to the nearest dollar. Question Content Area a. Brent uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2020: 1890 2021: 4550 2022: 5096 2023: 3920 Brent's adjusted basis in the auto on January 1, 2024, is $18944 Feedback Area Feedback A taxpayer has two choices in determining automobile expenses: the automatic mileage method and the actual cost method. A basis adjustment is required if the taxpayer changes from the automatic mileage method to the actual operating cost method. The law places special limitations on the cost recovery deduction for passenger automobiles. Question Content Area b. Brent 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 cost recovery limitation for an auto placed in service in 2020 is as follows: $10,100 (first year), $16,100 (second year), $9,700 (third year), and $5,760 (fourth year).] Compute his depreciation deductions for year. Click here to access the depreciation table. 2020: $ 2021: $ 2022: $ 2023: $ Brent's adjusted basis in the auto on January 1, 2024, is $ I figured out how to do the first part, and the answer is right. I think I know how to do the second part, but I can't get the answer right..
On July 1, 2020, Brent purchases a new automobile for $40,000. He uses the car 86% for business and drives the car for business purposes as follows: 7,000 miles in 2020, 17,500 miles in 2021, 19,600 miles in 2022, and 14,000 miles in 2023.
Determine Brent's basis in the business portion of the auto as of January 1, 2024, under the following assumptions:
If required, round your computations to the nearest dollar.
Question Content Area
a. Brent uses the automatic mileage method.
Compute his basis adjustments for
2020: 1890
2021: 4550
2022: 5096
2023: 3920
Brent's adjusted basis in the auto on January 1, 2024, is $18944
Feedback Area
A taxpayer has two choices in determining automobile expenses: the automatic mileage method and the actual cost method. A basis adjustment is required if the taxpayer changes from the automatic mileage method to the actual operating cost method. The law places special limitations on the cost recovery deduction for passenger automobiles.
Question Content Area
b. Brent 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 cost recovery limitation for an auto placed in service in 2020 is as follows: $10,100 (first year), $16,100 (second year), $9,700 (third year), and $5,760 (fourth year).]
Compute his depreciation deductions for year. Click here to access the depreciation table.2020: $
2021: $
2022: $
2023: $
Brent's adjusted basis in the auto on January 1, 2024, is $
I figured out how to do the first part, and the answer is right. I think I know how to do the second part, but I can't get the answer right..
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