Fonzi Purchases a Personal Computer for $4,000 on March 19,2013

question 77

Essay

Fonzi purchases a personal computer for $4,000 on March 19,2013.He used it personally for correspondence,keeping track of personal finances,and on-line data base services.His children used it for schoolwork and games.On June 1,2013,Fonzi starts a new secretarial service business and he converts the personal computer to 100% business use.The computer is worth $2,500 at the time (similar computers were selling for that amount in the used-computer market).
a.What is Fonzi's depreciable basis? Briefly explain your reasoning.
b.Fonzi desires to minimize depreciation deductions on the computer.What is the minimum allowable depreciation for 2013?

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Definitions:

Visceral Layer

The inner layer of a two-part serous membrane that covers internal organs.

Pleura

A double-layered membrane surrounding the lungs and lining the chest cavity, facilitating lung movement and serving as a protective layer.

Serous Membrane

A serous membrane is a thin layer of tissue that lines certain internal cavities of the body, secreting a serous fluid that lubricates and reduces friction between organs.

Serous Fluid

A clear, thin fluid that lubricates the surfaces between two membranes, reducing friction from muscle movement.