Phil owns a ranch business and uses four-wheelers to do much of his work. Occasionally, though, he and his boys will go for a ride together as a family activity. During year 1, Phil put 1,041 miles on the four-wheeler that he bought on January 15 for $8,900. Of the miles driven, only 181 miles were for personal use. Assume four-wheelers qualify to be depreciated according to the five-year MACRS schedule and the four-wheeler was the only asset Phil purchased this year.

TABLE 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 10-year Year 3-year 5-year 7-year 20.00 10.00 33.33 14.29 18.00 44.45 32.00 24.49 14.81 19.20 17.49 14.40 7.41 11.52 12.49 11.52 11.52 8.93 9.22 7.37 5.76 8.92 8.93 6.55 4.46 6.55 6.56 10 6.55 11 3.28 12 13 14 15 16 17 18 19 20 21 15-year 5.00 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 20-year 3.750 7.219 6.677 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 2.231