On September 14, 2016, 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.

Accelerated Depreciation for Personal Property Assuming Half-Year Convention (For Property Placed in Service after December 31, 1986)

Recovery Year			3-Year (200% DB)			5-Year (200% DB)			7-Year (200% DB)			10-Year (200% DB)			15-Year (150% DB)			20-Year (150% DB)
1			33.33			20.00			14.29			10.00			5.00			3.750
2			44.45			32.00			24.49			18.00			9.50			7.219
3			14.81	*		19.20			17.49			14.40			8.55			6.677
4			7.41			11.52	*		12.49			11.52			7.70			6.177
5						11.52			8.93	*		9.22			6.93			5.713
6						5.76			8.92			7.37			6.23			5.285
7									8.93			6.55	*		5.90	*		4.888
8									4.46			6.55			5.90			4.522
9												6.56			5.91			4.462	*
10												6.55			5.90			4.461
11												3.28			5.91			4.462
12															5.90			4.461
13															5.91			4.462
14															5.90			4.461
15															5.91			4.462
16															2.95			4.461
17																		4.462
18																		4.461
19																		4.462
20																		4.461
21																		2.231

ANNUAL AUTOMOBILE DEPRECIATION LIMITATIONSAUTOMOBILES ACQUIRED IN 2016
2016	Auto Depreciation
Year 1	$11,160*
Year 2	5,100
Year 3	3,050
Year 4 (and subsequent years until fully depreciated)	1,875

a. Calculate Jay's depreciation deduction for 2016 assuming bonus depreciation.

$

Feedback

Congress felt some taxpayers were using the favorable tax incentives of the accelerated cost recovery system and the limited expensing election to claim depreciation deductions on assets used for personal purposes. To curtail this perceived abuse of the tax system, Congress enacted special rules which apply to the depreciation of "listed property."

b. Assuming the same business percentage (75 percent) in 2017, calculate Jay's depreciation deduction for 2017.