A rap artist purchased a new truck on August 7th, 2017 for $42,000. He used the truck for personal use until October 1, 2020 when the truck was placed into service in his business. he did not place any other depreciable personal property in service in his business in 2020. He uses the fastest MACRS depreciation method available to depreciate the truck and does not take bonus depreciation or 179 expense with respect to the truck. On October 1st 2020 the truck had a fair market value of $26,000 .

You may assume the truck had a seven year recovery period. he sells the truck on June 2 of 2022 for $33,000.
 

What is the amount of allowable depreciation on his truck in 2020?

What (how much) if any is his realized gain or loss on the sale of the truck?

Answer rating: 100% (QA)

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