Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2021. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021: Cost $ 310,000 1,592,000 72,000 Date Placed in Service 02/03/2021 07/22/2021 08/17/2021 Asset Office furniture Machinery Used delivery truck* *Not considered a luxury automobile. During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to Increase its production capacity. These are the assets acquired during 2022: Cost $ 432,000 88,000 Asset Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Karane generated taxable income in 2022 of $1,772,500 for purposes of computing the §179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Date Placed in Service 03/31/2022 05/26/2022 1,360,000 800,000 08/15/2022 11/13/2022 c. Compute the maximum 2022 depreciation deductions, including §179 expense, but now assume that Karane would like to take bonus depreciation. Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2021. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021: Cost $ 310,000 1,592,000 72,000 Date Placed in Service 02/03/2021 07/22/2021 08/17/2021 Asset Office furniture Machinery Used delivery truck* *Not considered a luxury automobile. During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to Increase its production capacity. These are the assets acquired during 2022: Cost $ 432,000 88,000 Asset Computers and information system Luxury auto* Assembly equipment Storage building *Used 100% for business purposes. Karane generated taxable income in 2022 of $1,772,500 for purposes of computing the §179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Date Placed in Service 03/31/2022 05/26/2022 1,360,000 800,000 08/15/2022 11/13/2022 c. Compute the maximum 2022 depreciation deductions, including §179 expense, but now assume that Karane would like to take bonus depreciation. Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter5: Business Deductions
Section: Chapter Questions
Problem 29P
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Transcribed Image Text:Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2021. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2021:
Cost
$ 310,000
1,592,000
72,000
Date Placed in
Service
02/03/2021
07/22/2021
08/17/2021
Asset
Office furniture
Machinery
Used delivery truck*
*Not considered a luxury automobile.
During 2021, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2022 to
Increase its production capacity. These are the assets acquired during 2022:
Cost
$ 432,000
88,000
Asset
Computers and information system
Luxury auto*
Assembly equipment
Storage building
*Used 100% for business purposes.
Karane generated taxable income in 2022 of $1,772,500 for purposes of computing the §179 expense limitation. (Use
MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.)
Date Placed in
Service
03/31/2022
05/26/2022
1,360,000
800,000
08/15/2022
11/13/2022
Transcribed Image Text:c. Compute the maximum 2022 depreciation deductions, including §179 expense, but now assume that Karane would like to take
bonus depreciation.
Description
2021 Assets
Office Furniture
Machinery
Used Delivery Truck
2022 Assets
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
Cost
Section 179
Expense
Bonus
MACRS Basis
Current
MACRS
Depreciation
Total Cost
Recovery
Deduction
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