Question

On February 2, 2018, Alexandra purchases a personal computer for her home. The computer cost $5,720. Alexandra uses the computer 80 percent of the time in her accounting business, and the remaining 20 percent of the time for various personal uses. Calculate Alexandra's maximum depreciation deduction for 2018 for the computer, assuming half-year convention and she does not make the election to expense or take bonus depreciation.

Click here to access the depreciation table.

If required, round your answer to nearest dollar.
$_______________

On September 14, 2018, Jay purchased a passenger automobile that is used 75 percent in his accounting business. The automobile has a basis for depreciation purposes of $43,000, and Jay uses the accelerated method under MACRS. Jay does not elect to expense under section 179.

Click here to access the depreciation table and click here to access the annual automobile depreciation limitations.

Calculate Jay's depreciation deduction for 2018 assuming bonus depreciation.
$________________

An office machine used by Josie in her accounting business was completely destroyed by fire. The adjusted basis of the machine was $8,000 (original basis of $14,000 less accumulated depreciation of $6,000). The machine was not insured.

Calculate the amount and nature of Josie's gain or loss as a result of this casualty. (Assume this is the taxpayer's only casualty gain or loss.)

Amount of gain or loss: $________________

Answer 1