Part 2

2. Ih March, Gary Parker started a new career as a real estate agent. He established G Parker Company LLC on March 11 and began seeking clients. He listed his first property on March 21, and closed his first sale on April 9. Gary used his SUV, purchased three years ago and previously used for personal purposes, as his business auto. Once he began business as a real estate agent, he used the vehicle 100 percent for business purposes. Gary purchased the SUV three years ago for $54,000. At the date he started his real estate practice, it was worth approximately $28,000. (a) What is the maximum amount Gary can claim as a first-year deduction under Code Sec. 179 this year with-respect to the vehicle? (b) What is the maximum amount of depreciation expense Gary can claim with respect to the vehicle on the current year tax return? ary 43. Assume the same facts as problem 42. Further assume that next year, Gary sells the SUV for $20,000. (a) How much depreciation expense can Gary deduct as a business deduction with respect to the SUV on next year's tax return? (b) How much gain or loss will Gary recognize for tax purposes in conneetion with the sale of the vehicle next year