Walt purchased a computer for $3,600. He could use the computer exclusively for his business, or he could allow his family to use the computer 60% of the time and 40% would be for business use. Assume that Walt would not elect 179 expensing or 50% bonus, and that he is in the 25% tax bracket. (Use Table 6A-1 and Table 6-2)

Determine the tax deduction for the year of acquisition under both alternatives for the business use portion.

What is the overall tax savings between the two alternatives?

TABLE 6A-1

General Depreciation System 200% or 150% Declining Balance Switching to Straight-Line*

Half-Year Convention
Recovery Year	3-Year				5-Year			7-Year		10-Year			15-Year				20-Year
1	33.33				20.00			14.29		10.00			5.00				3.750
2	44.45				32.00			24.49		18.00			9.50				7.219
3	14.81				19.20			17.49		14.40			8.55				6.677
4	7.41				11.52			1 2.49		11.52			7.70				6.177
5		11.52				8.93			9.22			6.93				5.713
6		5.76				8.92			7.37			6.23				5.285
7			8.93				6.55				5.90				4.888
8			4.46				6.55				5.90				4.522
9				6.56					5.91					4.462
10				6.55					5.90					4.461
11				3.28					5.91					4.462
12						5.90						4.461
13						5.91						4.462
14						5.90						4.461
15						5.91						4.462
16						2.95						4.461
17									4.462
18									4.461
19									4.462
20									4.461
21									2.231

TABLE 6A-2

General Depreciation System 200% or 150% Declining Balance Switching to Straight-Line*

Mid-Quarter Convention (Property Placed in Service in 1st Quarter)
Recovery Year	3-Year				5-Year			7-Year		10-Year			15-Year				20-Year
1	58.33				35.00			25.00		19.50			8.75				6.563
2	27.78				26.00			21.43		16.50			9.13				7.000
3	12.35				15.60			15.31		13.20			8.21				6.482
4	1.54				11.01			10.93		10.56			7.39				5.996
5		11.01				8.75			8.45			6.65				5.546
6		1.38				8.74			6.76			5.99				5.130
7			8.75				6.55				5.90				4.746
8			1.09				6.55				5.91				4.459
9				6.56					5.90					4.459
10				6.55					5.91					4.459
11				0.82					5.90					4.459
12						5.91						4.460
13						5.90						4.459
14						5.91						4.460
15						5.90						4.459
16						0.74						4.460
17									4.459
18									4.460
19									4.459
20									4.460
21									0.557