2023 Assets Description Current Total Cost Cost Section 179 Expense Bonus MACRS Basis MACRS Depreciation Recovery Deduction Office Furniture Machinery Used Delivery Truck $ 400,000 $ 0 $ 0 $ 1,810,000 0 0 400,000 $ 1,810,000 0 $ 0 0 0 90,000 0 0 90,000 0 0 2024 Assets Computers and Information System 450,000 0 450,000 0 0 450,000 Luxury Auto 92,500 0 9,250 83,250 0 9,250 Assembly Equipment 1,200,000 1,160,000 40,000 0 0 1,200,000 Storage Building 800,000 0 0 800,000 2,568 2,568 Total $ 4,842,500 $ 1,160,000 $ 499,250 $ 3,183,250 $ 2,568 $ 1,661,818
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2023. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2023:
| Asset | Cost | Date Placed in Service |
|---|---|---|
| Office furniture | $ 400,000 | 02/03 |
| Machinery | 1,810,000 | 07/22 |
| Used delivery truck*Note: | 90,000 | 08/17 |
*Note:Not considered a luxury automobile.
During 2023, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2024 to increase its production capacity. These are the assets acquired during 2024:
| Asset | Cost | Date Placed in Service |
|---|---|---|
| Computers and information system | $ 450,000 | 03/31 |
| Luxury auto*Note: | 92,500 | 05/26 |
| Assembly equipment | 1,200,000 | 08/15 |
| Storage building | 800,000 | 11/13 |
*Note:Used 100 percent for business purposes.
Karane generated taxable income in 2024 of $1,795,000 for purposes of computing the §179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.)
Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.
Compute the maximum 2024 depreciation deductions, including §179 expense, but now assume that Karane would like to take bonus depreciation.
Note: Round your final answers to nearest whole dollar.
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