David Acquired an Automobile for $30,000 for Use in His

question 147

Multiple Choice

David acquired an automobile for $30,000 for use in his unincorporated business at the beginning of 2015 and used the standard mileage rate method in 2015.He plans to switch to the actual expense method for 2016.The automobile was used 25,000 miles in 2015.What is the amount of the adjusted basis of the automobile for purposes of computing depreciation in 2016?

• A)$30,000
• B)$15,625
• C)$24,000
• D)$20,000

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Definitions:

GDP

Gross Domestic Product, which is the total market value of all final goods and services produced within a country in a specific period.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate measure of economic growth by reflecting the value of all goods and services produced at constant prices.

Deflation

A drop in the overall cost of goods and services, frequently resulting from a decrease in the availability of money or credit.

Inflation

The measurement of how swiftly the overall prices of goods and services increase, eroding the power to buy.