Question
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2017. In the process of setting up the business, Karane has acquired
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2017. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2017:
Asset | Cost | Date Placed in Service | |
Office furniture | $ | 150,000 | 02/03/2017 |
Machinery | 1,560,000 | 07/22/2017 | |
Used delivery truck* | 40,000 | 08/17/2017 | |
|
*Not considered a luxury automobile.
During 2017, Karane was very successful (and had no 179 limitations) and decided to acquire more assets this next year to increase its production capacity. These are the assets acquired during 2018:
Asset | Cost | Date Placed in Service | |
Computers & info. system | $ | 400,000 | 03/31/2018 |
Luxury auto | 80,000 | 05/26/2018 | |
Assembly equipment | 1,200,000 | 08/15/2018 | |
Storage building | 700,000 | 11/13/2018 | |
|
Used 100% for business purposes.
Karane generated taxable income in 2018 of $1,732,500 for purposes of computing the 179 expense. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Assume the 2017 179 limits are the same as those in 2018. (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.)
Compute the maximum 2018 depreciation deductions including 179 expense (ignoring bonus depreciation).
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