76. Karane Enterprises, a calendar-year manufacturer based in Collegee Station, Texas, beegan 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 Date Placed in Service Asset Cost Office furniture 150,000 1,560,000 40,000 02/03/2018 Machinery Used delivery truck 07/22/2018 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 Page 10-58 the assets acquired during 2019: Date Placed in Service Asset Cost Computers & info. system Luxury auto Assembly equipment Storage building 40,000 80,000 1,200,000 700,000 03/31/2019 05/26/2019 08/15/2019 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. Required 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 Cost Date Placed in Service Inventory Office furniture $220,000 230,000 250,000 198,000 2,000 430,000 20,000 09/15/2019 09/15/2019 Machinery Patent 09/15/2019 09/15/2019 Goodwill 09/15/2019 Building Land 09/15/2019 09/15/2019 e. Complete Part I of Form 4562 for part (b) (use the most current form available) 76. Karane Enterprises, a calendar-year manufacturer based in Collegee Station, Texas, beegan 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 Date Placed in Service Asset Cost Office furniture 150,000 1,560,000 40,000 02/03/2018 Machinery Used delivery truck 07/22/2018 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 Page 10-58 the assets acquired during 2019: Date Placed in Service Asset Cost Computers & info. system Luxury auto Assembly equipment Storage building 40,000 80,000 1,200,000 700,000 03/31/2019 05/26/2019 08/15/2019 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. Required 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 Cost Date Placed in Service Inventory Office furniture $220,000 230,000 250,000 198,000 2,000 430,000 20,000 09/15/2019 09/15/2019 Machinery Patent 09/15/2019 09/15/2019 Goodwill 09/15/2019 Building Land 09/15/2019 09/15/2019 e. Complete Part I of Form 4562 for part (b) (use the most current form available)