In 2019, Ben purchases and places in service a new auto for his business. The auto costs $57,000 and will be used 100 percent for business. Assuming the half-year convention applies and Ben does not elect out of bonus depreciation, what will depreciation on the auto be in 2018

$11,400

Explanation:

The Automotive price is = $57,000.

Vehicle used for business purposes= 100%.

This will be known as a property that will last five years.

Half-year convention average for the first year is 20 per cent.

Since the asset is used 100 percent for business purposes, the book value

= $57,000* 100 percent

= $57,000 for business purposes.

As incentive depreciation is not an immediate cost, car depreciation

= $57,000* 20 per cent

= $11,400.

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