In May 2007, Jose purchased a used automobile for $12,000 and used it 75 percent for business. No Section 179 election was made for this asset. In 2008, Jose’s business use of the automobile decreases to 45 percent. As a result of this change in business use

a. there is no change in the way Jose computes his 2008 depreciation.

b. Jose’s depreciation in 2008 is $2,250.

c. Jose must recapture $900 as ordinary income.

d. Jose must amend the 2007 tax return and recompute depreciation.

AppendixLO1