Problem 9-24 (LO. 2) On July 1, 2015, Rex purchases a new automobile for $40,000. He uses the car 80% for business and drives the car as follows: 8,000 miles in 2015, 19,000 miles in 2016, 20,000 miles in 2017, and 15,000 miles in 2018. Determine Rex's basis in the business portion of the auto as of January 1, 2019, under the following assumptions: If required, round answers to the nearest dollar. a. Rex uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2015: SL 2016: $ 2017: $ 2018: $ Rex's adjusted basis in the auto on January 1, 2019, is $ Feedback Check My Work b. Rex uses the actual cost method. (Assume that no 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. The recovery limitation for an auto placed in service in 2015 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year), and $1,875 (fourth year).) Compute his depreciation deductions for year. Click here to access the depreciation table. 2015: $ 2016: $ 2017: $ 2018: $ Rex's adjusted basis in the auto on January 1, 2019, is $ Foodback Check My Work The law places special limitations on the cost recovery deduction for passenger automobiles. These statutory dollar limits were in passenger automobiles because of the belief that the tax system was being used to underwrite automobiles whose cost and luxu exceeded what was needed for their business use. Year Rate per Mile 2019 2018 2017 2016 2015 26 cents 25 cents 25 cents 24 cents 24 cents