Modified Accelerated Cost Recovery System $($MACRS$)$ and Bonus Depreciation, Election to Expense $($Section $179),$ Listed Property, Limitation on Depreciation of Luxury Automobiles $($LO $8\mathrm{.}2,8\mathrm{.}3,8\mathrm{.}4,8\mathrm{.}5)$

During $2023,$ Khan purchases the following capital assets for use in his catering business:

Line Item DescriptionAmountNew passenger automobile $($September $30)$$$66,000$Baking equipment $($June $30)10,000$

Assume that Khan decides to use the election to expense on the baking equipment $($and has adequate taxable income to cover the deduction$)$ but not on the automobile, and he also uses the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation.

Click here to access the depreciation table and click here to access the annual automobile depreciation limitations$.$

Calculate Khan's maximum depreciation deduction for $2023,$ assuming he uses the automobile $100$ percent in his business.

fill in the blank $1$ of $1$$