Graham started his own landscaping business this year. He is interested in getting the greatest deduction he can on the capital-asset purchases he made this year. He provides you with the following list of purchases:
Date of Purchase/ Contribution
Graham’s personal contribution of riding lawnmower
FMV at contribution $4,200
New zero-turn super mower
New dump truck
Used Ford Focus
$12,456 (60% business use)
The taxable income before any depreciation deduction for the year is $158,000.
Using relevant tax laws and regulations, identify and explain the maximum depreciation deduction for Graham’s business.
Use the tax research memo outline to create your tax memo.