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In January of 2015, Carol Brady is trying to decide if she should purchase a new vehicle for her business, We Are Brady, Inc. Carol has asked you to calculate the amount of depreciation that she will be able to deduct for each of the following vehicles that she is considering purchasing. Assume that she will purchase the vehicle in April, 2015 and also assume that no other assets will be purchased in 2015.
a. If Carol purchases a new Porsche for $135,000, what is the maximum amount that Carol may deduct in 2015? Carol plans to drive the Prosche 75% of the time for business. Carol elects to take the additional first year depreciation.
b. If Carol purchases a Ford Explorer (an SUV with GVRW>6,000) for $55,000, what is the maximum amount that Carol may deduct in 2015? Carol plans to drive the Explorer 100% of the time for business. Carol elects not to take the additional first year depreciation.
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