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

Exercise 40

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).