If a self-employed individual uses the standard mileage rate method for the year in which an automobile is acquired, may the actual expense method be used in a subsequent year? If so, what restrictions are imposed (if any) on depreciation methods? What adjustments to basis are required?

A.The actual expense method may be used in subsequent years. However, MACRS under the regular method must be used for computing depreciation and the basis of the automobile must be reduced by 26 cents per mile in 2021.

B.The actual expense method may be used in subsequent years for self-employed individuals. However, MACRS under the regular method may not be used for computing depreciation (straight-line method is required) and the basis of the automobile must be reduced by 26 cents per mile in 2021.

C.The actual expense method may be used in subsequent years without restrictions on the depreciation methods. The basis of the automobile must be reduced by 26 cents per mile in 2021.

D. The actual expense method may not be used in subsequent years; once the standard mileage rate method is selected, it has to be used for the life of the automobile.