Assume that Ernesto purchased a laptop computer on July 10 of year 1 for $3,000.

In year 1, 80 percent of his computer usage was for his business and 20 percent was for computer gaming with his friends. This was the only asset he placed in service during year 1. Ignoring any potential §179 expense and bonus depreciation, answer the questions for each of the following alternative scenarios:

a) What is Ernesto’s depreciation deduction for the computer in year 1?

b) What would be Ernesto’s depreciation deduction for the computer in year 2 if his year 2 usage was 75 percent business and 25 percent for computer gaming?

c) What would be Ernesto’s depreciation deduction for the computer in year 2 if his year 2 usage was 45 percent business and 55 percent for computer gaming?

d) What would be Ernesto’s depreciation deduction for the computer in year 2 if his year 2 usage was 30 percent business and 70 percent for computer gaming?

67. Lina purchased a new car for use in her business during 2016. The auto was the only business asset she purchased during the year and her business was extremely profitable. Calculate her maximum depreciation deductions (including

§179 expense unless stated otherwise) for the automobile in 2016 and 2017

(Lina doesn’t want to take bonus depreciation for 2016 or 2017) in the following alternative scenarios (assuming half-year convention for all):

a) The vehicle cost $15,000 and business use is 100 percent (ignore §179 expense).

b) The vehicle cost $40,000, and business use is 100 percent.

c) The vehicle cost $40,000, and she used it 80 percent for business.

d) The vehicle cost $40,000, and she used it 80 percent for business. She sold it on March 1 of year 2.

e) The vehicle cost $40,000, and she used it 20 percent for business.

f ) The vehicle cost $40,000, and is an SUV that weighed 6,500 pounds.

Business use was 100 percent.