76. Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2018. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2018: Asset Cost Date Placed in Service Office furniture $ 150,000 02/03/2018 Machinery 1,560,000 07/22/2018 Used delivery truck* 40,000 08/17/2018 * Not considered a luxury automobile. During 2018, Karane was very successful (and had no $179 limitations) and decided to acquire more assets in 2019 to increase its production capacity. These are the assets acquired during 2019: Page 10-58 Asset Cost Date Placed in Service Computers & info. system $ 40,000 03/31/2019 Luxury auto* 80,000 05/26/2019 Assembly equipment 1,200,000 08/15/2019 Storage building 700,000 11/13/2019 *Used 100% for business purposes. Karane generated taxable income in 2019 of $1,732,500 for purposes of computing the $179 expense limitation. a) Compute the maximum 2018 depreciation deductions, including $179 expense (ignoring bonus depreciation). b) Compute the maximum 2019 depreciation deductions, including $179 expense (ignoring bonus depreciation). c) Compute the maximum 2019 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. d) Now assume that during 2019, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2019 cost recovery, including $179 expense and bonus depreciation. Karane purchased the following assets for the lump-sum purchase price: Asset Inventory Office furniture Machinery Patent Goodwill Building Land Cost $220,000 230,000 250,000 198,000 2,000 430,000 20,000 Date Placed in Service 09/15/2019 09/15/2019 09/15/2019 09/15/2019 09/15/2019 09/15/2019 09/15/2019 76. Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2018. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2018: Asset Cost Date Placed in Service Office furniture $ 150,000 02/03/2018 Machinery 1,560,000 07/22/2018 Used delivery truck* 40,000 08/17/2018 * Not considered a luxury automobile. During 2018, Karane was very successful (and had no $179 limitations) and decided to acquire more assets in 2019 to increase its production capacity. These are the assets acquired during 2019: Page 10-58 Asset Cost Date Placed in Service Computers & info. system $ 40,000 03/31/2019 Luxury auto* 80,000 05/26/2019 Assembly equipment 1,200,000 08/15/2019 Storage building 700,000 11/13/2019 *Used 100% for business purposes. Karane generated taxable income in 2019 of $1,732,500 for purposes of computing the $179 expense limitation. a) Compute the maximum 2018 depreciation deductions, including $179 expense (ignoring bonus depreciation). b) Compute the maximum 2019 depreciation deductions, including $179 expense (ignoring bonus depreciation). c) Compute the maximum 2019 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. d) Now assume that during 2019, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2019 cost recovery, including $179 expense and bonus depreciation. Karane purchased the following assets for the lump-sum purchase price: Asset Inventory Office furniture Machinery Patent Goodwill Building Land Cost $220,000 230,000 250,000 198,000 2,000 430,000 20,000 Date Placed in Service 09/15/2019 09/15/2019 09/15/2019 09/15/2019 09/15/2019 09/15/2019 09/15/2019