On June 1,2010,James Places in Service a New Automobile That

question 53

Multiple Choice

On June 1,2010,James places in service a new automobile that cost $40,000.The car is used 60% for business and 40% for personal use.(Assume this percentage is maintained for the life of the car. ) If Congress reenacts additional first-year depreciation for 2010,James does elect not to take additional first-year depreciation.Determine the cost recovery deduction for 2010.

• A)$1,776.
• B)$1,836.
• C)$6,576.
• D)$8,000.
• E)None of the above.

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Definitions:

Adjustable-Rate Mortgage

A type of home loan in which the interest rate can change over time, based on a benchmark or index.

Fixed-Rate Mortgage

A home loan with an interest rate that remains the same for the entire term of the loan, providing predictable monthly payments.

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Mortgagor

The borrower in a mortgage agreement, who pledges property to the lender as security for the loan.