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8-49 (LO. 2, 4, 9) Sally purchased a new computer (5-year property) on June 1, 2017, for $4,000. Sally could use the computer 100% of
8-49 (LO. 2, 4, 9) Sally purchased a new computer (5-year property) on June 1, 2017, for $4,000. Sally could use the computer 100% of the time in her business, or she could allow her family to use the computer as well. Sally estimates that if her family uses the computer, the business use will be 45% and the personal use will be 55%. Determine the tax cost to Sally, in the year of acquisition, of allowing her family to use the computer. Assume that Sally would not elect 179 immediate expensing and that her marginal tax rate is 32%. She does not claim any available additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access the depreciation tables to use for this problem. a. What is the amount of the depreciation deduction if the computer is used 100% for business? 800 b. If Sally allows 55% personal use of the computer by her family, then the amount of the depreciation deduction is $ c. What is the tax cost to Sally, in the year of acquisition, of allowing her family to use the computer? 180 174 X
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