LO.6 John Johnson is considering acquiring an automobile at the beginning of 2010 that COMMUNI CAT IONS he will use 100% of the time as a taxi. The purchase price of the automobile is $35,000.

John has heard of cost recovery limits on automobiles and wants to know the maximum amount of the $35,000 he can deduct in the first year. Write a letter to John in which you present your calculations. Also, prepare a memo for the tax files. John’s address is 100 Morningside, Clinton, MS 39058.