Final answer:
The item that may not be depreciated using an accelerated method is a farm truck that is operated for personal use more than 50 per cent of the time. The farming tractor, the computer used for the business, and the corn-husking machine all qualify for accelerated depreciation.
Step-by-step explanation:
The student has asked which of the following may not be depreciated using an accelerated method:
- A farming tractor
- A computer used strictly for the farming business
- A corn-husking machine
- A farm truck that is operated for personal use more than 50 per cent of the time
The correct answer to this question is d) A farm truck that is operated for personal use more than 50 per cent of the time. Accelerated depreciation methods, such as the Modified Accelerated Cost Recovery System (MACRS), are typically used for business assets to recover investments in certain properties over a shorter period than the straight-line method.
Items a), b), and c) are all used exclusively for business purposes and, therefore, qualify for accelerated depreciation. However, Item d) is used primarily for personal purposes, disqualifying it from being depreciated using an accelerated method as per IRS guidelines. Tax laws generally allow for accelerated depreciation of assets used predominantly for business purposes, a threshold that the farm truck does not meet.
When referring to farm equipment and vehicles, it is essential to consider their use. A farming tractor and a corn-husking machine are integral to farm productivity and, alongside the business-used computer, represent assets with a business-exclusive utilization, making them eligible for accelerated depreciation.