Question

Holly is a small business owner whose income is reported on Schedule C. She placed her 2016 Honda Accord into service when she purchased it on January 1, 2018 for $24,000. She did not claim any §179 expense, but she did claim bonus depreciation. In 2018, she drove her vehicle 9,600 miles for business, 5,200 commuting miles, and a total of 18,000. What is Holly's depreciation for the car in 2018?
$9,600
$12,000
$18,000
$24,000

Answer 1

Answer:

$12,000

Explanation:

In calculating deprecation, a small business can use the convention method or follow the guidelines provided by the IRS guidelines for claiming depreciation.

Holly car was purchased in January 1 , 2018 for $ 24,000. Depreciation for 2018 will be first first. Under schedule C. first year depreciation is at 50 percent.

Therefore deprecation = 50/100 x $ 24,000.00

                                        =$12,000.00