Reg – AICPA sample testelt 4 (question 1)

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  • #1780139
    setmefree
    Participant

    Can someone help me with this question, thank you in advance.

    Linda brought a new vehicle at year 1 of $20k, she did not election section 179 or bonus depreciation. The depreciable life of the vehicle is 5 years, and linda use Macrs to calculate the deprecation for income tax purpose. she sold the vehicle in year 2 for 18k.
    The Macrs 5 year depreciation is the following rate.
    Year 1 : 20%
    year 2: 32%
    year 3: 19.2%
    year 4 & 5: 11.52%

    what is the remaining basis before sale using the actual expenses method since purchase? – the answer is $14,600

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