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:
Item
Date of Purchase/ Contribution
Cost
Graham’s personal contribution of riding lawnmower
5/4/xx
$5,878
FMV at contribution $4,200
New zero-turn super mower
4/7/xx
$15,989
Used backhoe
9/23/xx
$26,000
New dump truck
10/8/xx
$45,763
Used garage
11/9/xx
$78,555
New computer
7/19/xx
$3,450
Used Ford Focus
6/6/xx
$12,456 (60% business use)
Additional Information
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.
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