McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 20

Phil owns a ranch business and uses 4-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 765 miles on the 4-Wheeler that he bought on January 15 for $6,500. Of the miles driven, only 175 miles was for personal use. Assume 4-Wheelers qualify to be depreciated according to the 5-Year MACRS schedule and the 4-Wheeler was the only asset Phil purchased this year.
Calculate the allowable depreciation for the year 1 (ignore the §179 expense and bonus depreciation). Calculate the allowable depreciation for year 2 if total miles were 930 and personal use miles were 400 (ignore the §179 expense and bonus depreciation).