John Johnson is considering acquiring an automobile at the beginning of 2014 that he will use 100% of the time as a taxi. The purchase price of the automobile is $35,000. John has heard of cost recovery limits on automobiles and wants to know the maximum amount of the $35,000 he can deduct in the first year.

Write a letter to John in which you present your calculations. Also prepare a memo for the tax files, summarizing your analysis. John's address is 100 Morningside, Clinton, MS 39058.