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On July 1, 2016, Rex purchases a new automobile for $41,500. He uses the car 94% for business and drives the car as follows: 8,000
On July 1, 2016, Rex purchases a new automobile for $41,500. He uses the car 94% for business and drives the car as follows: 8,000 miles in 2016, 20,000 miles in 2017, 22,400 miles in 2018, and 16,000 miles in 2019. Determine Rex's basis in the business portion of the auto as of January 1, 2020, under the following assumptions: If required, round your computations to the nearest dollar. a. Rex uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2016: $ 2017: $ 2018: $ 2019: $ Rex's adjusted basis in the auto on January 1, 2020, is $ b. Rex uses the actual cost method. [Assume that no 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. The recovery limitation for an auto placed in service in 2016 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year), and $1,875 (fourth year).] Compute his depreciation deductions for year. Click here to access the depreciation table. 2016: $ 2017: $ Odll 2018: $ 2019: Rex's adjusted basis in the auto on January 1, 2020, is $
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