Fonzi Purchases a Personal Computer for $4,000 on March 19,2016

Essay

Fonzi purchases a personal computer for $4,000 on March 19,2016.He used it personally for correspondence,keeping track of personal finances,and on-line data base services.His children used it for schoolwork and games.On June 1,2016,Fonzi starts a new secretarial service business and he converts the personal computer to 100% business use.The computer is worth $2,500 at the time (similar computers were selling for that amount in the used-computer market).
a.What is Fonzi's depreciable basis? Briefly explain your reasoning.
b.Fonzi desires to minimize depreciation deductions on the computer. What is the minimum allowable depreciation for 2016?