Assume that Ernesto purchased a digital camera on July 10 of year 1 for $3,000. In year 1, 80 percent of his camera usage was for his business and 20 percent was for personal photography activities. This was the only asset he placed in service during year 1. Ignoring any potential 179 expense and bonus depreciation, answer the questions for each of the following alternative scenarios: (Use MACRS Table 1, Table 2.)

What would be Ernestos depreciation deduction for the camera in year 2 if his year 2 usage was 30 percent business and 70 percent for personal use?

Depreciation Expense=?

TABLE 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 5-Year 7-Year 10-Year 15-Year 20-Year Year 3-Year 3.750% 7.219 6.677 20.00% 32.00 19.20 11.52 11.52 5.76 10.00% 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 14.29% 33.33% 44.45 14.81 7.41 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 24.49 2 3 4 5 6 17.49 12.49 8.93 8.92 8.93 4.46 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 21 8 9 10 15 19 20