On October 15, 2019, Jon purchased and placed in service a used car. The purchase price was $38,000. This was the only business use asset Jon acquired in 2019. He used the car 80% of the time for business and 20% for personal use. Jon used the regular MACRS method and does not claim any expense under § 179 or additional first-year depreciation. If required, round your answers to the nearest dollar. Click here to access Exhibit 8.4 and Exhibit 8.5 of the textbook. Click here to access the limits for certain automobiles. a. Is the car eligible for additional first-year depreciation? Yes b. What MACRS convention applies to the new car? Mid-quarter c. Is the automobile considered "listed property"? Yes d. Does the automobile satisfy the "predominantly used for business" definition? Yes e. The total cost recovery deduction Jon may take for 2019 with respect to the car is $

Cost recovery deduction = $1520

Solution:

Given data

purchase price = $38,000

used the car  business  = 80%

used the car  personal = 20%

solution

cost recovery limit are,

cost recovery limit = asset value × statutory % × mid quarter convention  

We recognize the 5-year MACRS convention of car and the depreciation rate of MACRS is 20 percent in the first year.

so we use MACRS statutory % method

cost recovery limit = $38000 × 5%

cost recovery limit = $1900

we know maximum limit is $3160

so cost of recovery is $1900

so,

cost recovery deduction is

cost recovery deduction = cost recovery limit - personal use

cost recovery deduction = $1900 - ( $1900 × 20% )

cost recovery deduction = $1520

A: Income Tax

Corporate taxes are a type of income tax.

Explanation:

Income tax refers to tax imposed or levied by the government on individual and business income within their jurisdiction. Tax rates vary by type and characteristics of the person paying the tax which may increase as taxable income increases. Governments use the taxes they collect to provide social basic amenities like education, good roads, electricity, good sewage system and so on.

Corporate taxes refer to taxes levied by the government on the profit of a firm or company.