BELOW WILL BE THE QUESTION AND A FEW CHARTS TO REEFERENCE IN ORDER THE ANSWER THE QUESTION. THE LAST IMAGE WILL THE PROBLEM AND EVERYTHING ABOVE WILL BE THE QUESTION AND CHARTS. PLEASE ANSWER VERY CLEARLY.

BELOW ILL BE THE PROBLEM AND ABOVE IS THE QUESTIONS AND CHARTS

Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020: Asset Cost Office furniture $ 370,000 Machinery 1,604,000 Used delivery truck* 84,000 *Not considered a luxury automobile. Date Placed in Service 02/03/2020 07/22/2020 08/17/2020 During 2020, Karane was very successful (and had no $179 limitations) and decided to acquire more assets in 2021 to increase its production capacity. These are the assets acquired during 2021: Asset Computers and information system Luxury autot Assembly equipment Storage building Cost $ 444,000 91,000 1,420,000 800,000 Date Placed in Service 03/31/2021 05/26/2021 08/15/2021 11/13/2021 tUsed 100% for business purposes. Karane generated taxable income in 2021 of $1,787,500 for purposes of computing the $179 expense limitation. Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% Year 2 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 5.76 8.92 7.37 6.23 5.285 Year 7 8.93 6.55 5.90 4.888 Year 8 4.46 6.55 5.90 4.522 Year 9 6.56 5.91 4.462 Year 10 6.55 5.90 4.461 Year 11 3.28 5.91 4.462 Year 12 5.90 4.461 Year 13 5.91 4.462 Year 14 5.90 4.461 Year 15 5.91 4.462 Year 16 2.95 4.461 Year 17 4.462 Year 18 4.461 Year 19 4.462 Year 20 4.461 Year 21 2.231 TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 35.00% 25.00% Year 2 26.00 21.43 Year 3 15.60 15.31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 1.38 8.74 Year 7 8.75 Year 8 1.09 TABLE 26 MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 25.00% 17.85% Year 2 30.00 23.47 Year 3 18.00 16.76 Year 4 11.37 11.97 Year 5 11.37 8.87 Year 6 4.26 8.87 Year 7 8.87 Year 8 3.34 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 15.00% 10.71% Year 2 34.00 25.51 Year 3 20.40 18.22 Year 4 12.24 13.02 Year 5 11.30 9.30 Year 6 7.06 8.85 Year 7 8.86 Year 8 5.53 TABLE 20 MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 5.00% 3.57% Year 2 38.00 27.55 Year 3 22.80 19.68 Year 4 13.68 14.06 Year 5 10.94 10.04 Year 6 9.58 8.73 Year 7 8.73 Year 8 7.64 TABLE 3 Residential Rental Property Mid-Month Convention Straight Line-27.5 Years Month 2 Month 3 Month 4 Month Property Placed in Service Month 5 Month 6 Month 7 2.273% 1.970% 1.667% Month 8 Month 2 Month 10 Month 11 Month 1 3.485% Month 12 Year 1 3.182% 2.879% 2.576% 1.364% 1.061% 0.758% 0.455% 0.152% 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 Year 2-9 Year 10 Year 11 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 Year 12 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 Year 13 3.636 3.636 3.636 3.636 3.636 3,636 3.637 3.637 3.637 3.637 3.637 3.637 Year 14 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 Year 15 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3,637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3,637 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 Year 16 Year 17 Year 18 Year 19 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 Year 20 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 Year 21 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 Year 22 Year 23 Year 24 Year 25 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 Year 26 3.637 3.637 3.637 3.637 3.637 3.637 3.636 3.636 3.636 3.636 3.636 3.636 Year 27 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.637 3.637 Year 28 1.97 2.273 2.576 2.879 3.182 3.485 3.636 3.636 3.636 3.636 3.636 3.636 Year 29 0.152 0.455 0.758 1.061 1.364 1.667 Month 1 Month 2 Month 3 Month Month 9 Month 11 Month 12 Month & 1.190% Year 1 2.778% 2.249% 0.926% 3.042% 3.175 0.132% 2.513% 3.175 Month 10 0.661% 3.175 0.397% 3.175 Year 2-7 3.175 Month Property Placed in Service Month 5 Month 6 Month 7 1.981% 1.720% 1.455% 3.175 3.175 3.175 3.173 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.175 3.175 3.175 3.175 3.174 3.175 3.175 3.175 3.175 3.175 Year 8 Year 9 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.175 3.175 3.175 3.174 3.175 Year 10 3.1 74 3.175 3.174 3.174 3.174 Year 11 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 12 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 Year 13 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.173 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 14 Year 15 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 16 3.175 3.1 74 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 Year 17 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 Year 18 Year 19 3.175 3.174 3.174 3.175 3.175 3.174 3.174 3.175 3.175 3.174 3.174 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.175 3.175 Year 20 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.174 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.175 Year 21 Year 22 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.175 3.174 3.175 3.175 3.174 3.174 3.175 3.174 3.174 Year 23 3.174 3.175 3.174 3.174 3.115 3.175 3.174 3.175 3.175 3.174 3.174 3.175 3.174 3.174 3.174 3.175 3.174 3.174 3.175 Year 24 Year 25 3.174 3.173 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 26 Year 27 Year 28 3.174 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.175 3.174 3.174 3.175 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.175 3.1 74 3.175 3.174 3.174 3.175 Year 29 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.173 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.175 Year 30 Year 31 Year 32 Year 33 3.174 3.175 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.174 3.175 3.174 3.174 0.132 0.397 0.661 0.926 1.190 1.433 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service Month 5 Month 6 Month 7 Month 1 Month 2 Month 3 Month 4 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 2.461% 2.247% 2.033% 1.819% 1.605% 1.391% 1.177% 0.963% 0.749% 0.535% 0.321% 0.107% Year 239 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 Year 40 0.107 0.321 0.535 0.749 0.963 1.177 1.391 1.605 1.819 2.033 2.247 2.461 EXHIBIT 10-10 Automobile Depreciation Limits Recovery Year 1 Year Placed in Service 2020 2019 10,100** 10,100** 16,100 16,100 9,700 9,700 5,760 5,760 2021* 10,100** 16,100 9,700 5,760 2 2018 10,000** 16,000 9,600 5,760 3 4 and after Compute the maximum 2021 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Description Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction 2020 Assets Office Furniture $ 0 0 o o Machinery Used Delivery Truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building 0 . o o 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 0