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

Exercise 12

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 were 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 were 45 percent business and 55 percent for computer gaming?
d.What would be Ernesto's depreciation deduction for the computer in year if his year 2 usage were 30 percent business and 70 percent for computer gaming?