Question

Alex purchased a personal lawn mower to use for mowing his lawn and the lawns at his rental properties. The depreciation expense for the mower was $300. At the end of the season, he documents that he used the mower 70% for his rental properties and 30% for personal purposes. How much can he deduct as a business expense?

Options:
Option 1: $210
Option 2: $0
Option 3: $300
Option 4: $90

Answer 1

Alex can deduct $210 as a business expense for the depreciation of his personal lawn mower because it was used 70% for his rental properties. The correct answer is Option 1: $210.

Step-by-step explanation:

The question is regarding the amount of depreciation expense that can be deducted as a business expense by Alex for the usage of his personal lawn mower for his rental property business. Since 70% of the mower's usage is for the rental properties, he can only deduct the percentage of the depreciation that corresponds to business use. The total depreciation expense for the mower is $300, so the business portion would be $300 × 70%, which equals $210. Therefore, Option 1: $210 is the correct amount that can be deducted as a business expense.