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: Date Placed in Asset Office furniture Machinery Used delivery truck Cost Service $ 260,000 1,582,000 62,000 02/03/2021 07/22/2021 08/17/2021 "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: Asset Date Placed in Service Computers and information system Cost $ 422,000 03/31/2022 Luxury auto Assembly equipment Storage building 85,500 1,310,000 900,000 05/26/2022 08/15/2022 11/13/2022 *Used 100% for business purposes. Karane generated taxable income in 2022 of $1,760,000 for purposes of computing the $179 expense limitation. (Use MACRS Table 1. Table 2. Table 3. Table 4. Table 5, and Exhibit 10-10.) Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Comprehensive Problem 10-76 Part a (Algo) Required: Compute the maximum 2021 depreciation deductions, including $179 expense (ignoring bonus depreciation). Description Office furniture Machinery Used delivery truck Total Cost $179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction $ 0 0 0 $ 0 $ 0 $ 0 $ 0 10 0 Comprehensive Problem 10-76 Part b (Algo) Required: b. Compute the maximum 2022 depreciation deductions, including $179 expense (ignoring 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 MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction $ 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 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 $ 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 d. Now assume that during 2022, Karane decides to buy a competitor's assets for a purchase price of $1,481,780. Compute the maximum 2022 cost recovery, including $179 expense and bonus depreciation. Karane purchased the following assets for the lump- sum purchase price: Note: Round your final answers to the nearest whole dollar amount. Asset Inventory Date Placed in Service office furniture Machinery Patent Goodwill Building Land Cost $ 242,000 09/15/2022 252,000 09/15/2022 272,000 09/15/2022 217,800 09/15/2022 3,980 09/15/2022 452,000 42,000 09/15/2022 09/15/2022 Assume that Karane takes the maximum section 179 expense for the Assembly Equipment. Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and information System Luxury Auto Assembly Equipment Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Current Amortization Total Cost Recovery Deduction $ 0 0 0 00 Required information Assume that Karane takes the maximum section 179 expense for the Assembly Equipment. Description 2021 Assets Office Furniture Machinery Used Delivery Truck 2022 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Inventory Office Furniture Machinery Patent Goodwill Building Land Totals Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Current Amortization Total Cost Recovery Deduction $ 0 0 0 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 $ $ 0 Table 1 MACRS Half-Year Convention 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 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 2b 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 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 5.53 Year 8 TABLE 2d 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 1 Month 2 Month 3 Month 4 Month Property Placed in Service Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 3.485% 3.182% 2.879% 2.576% 2.273% 1.970% 1.667% 1.364% 1.061% 0.758% 0:455% 0.152% Year 2-9 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 10 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 11 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 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 Year 161 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 17 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 18 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 19. 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 Year 22 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 23 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 241 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 25 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 3.1821 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 TABLE 4 Nonresidential Real Property Mid-Month Convention Straight Line-31.5 Years (for assets placed in service before May 13, 1993) Month Property Placed in Service Month 1 Month 2 Month 3 Month 4 Month 51 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 3.042% 2.778% 2.513% 2.249% 1.984% 1.720% 1.455% 1.190% 0.926% 0.661% 0.397% 0.132% Year 2-7 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 Year 8 3.175 3.174 3475 3.174 3.175 3.174 3.175 3.175 3.175 3.175 3.175 3.175 Year 9 3.174 3.175 3.174 3.175 3174) 3:175 3.174 3.175 3.174 3.175 3.174 3.175 Year 10 3.475 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 11 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 12 3375 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3:175 3.174 Year 13 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 14 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 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 3.474 3.175 3.174 3.175 3.174 3:175 3.174 3.175 3.174 3.175 3.174 Year 17 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3:174 3.175 Year 18 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 19 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 20 3.375 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 21 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 22 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 23 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.115 3.174 3.175 3.174 3.175 Year 24 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 25 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 26 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 27 3174 3175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 28 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 29 3.174 3.175 3174 3.175 3.174 3.175 3:174 3.175 3.174 3.175 3.174 3.175 Year 30 3175 3.174 3.175 3.174 3.375 3174) 3.175 3.174 3.175 3.174 3.175 3.174 Year 31 3.174 3.175 3.374 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 32 1.720 1984 2.249 2.513 2.778 3.042 3.175 3.174 3.175 3.174 3.175 3.174 Year 33 0.132 0.397 0.661 0926 1.190 1455 C ezto-d-media.mheducation.com/Media/Connect Production/bne/accounting/spilker 14e/ch10 table5.htm Microsoft Office Ho lecture book BC TRANSLATING MyLab IT | Pearson Sign In | Connect USCIS 1-8210, Co tax rate 22 TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line-39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service Month 1 Meath 2 Month 3 Month 4 Month 5 Month 61 Month 7 Month S Month 9 Month 101 Month 11 Month 12 Year 1 Year 2-39 2.461% 2247% 2.033% 1810% L605% 1391% 1.17% 0.96% 0.740% 0.53% 6321% 0.107% 2564 2.364 2.564 2.364 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2564 Year 40 0.107 0321 0335 0.749 0960 1.177 1391 1.605 1.819 2013 2.347 2461 Recovery EXHIBIT 10-10 Automobile Depreciation Limits Year Placed in Service Year 2022 2021 2020 I 10,200 10,200 2 3 16,400 16,400 10,100** 16,100 2019 10,100** 16,100 9,800 9,800 4 and after 5,860 5,860 9,700 5,760 9,700 5,760 "Ax of press date, the IRS had not released the 2022 limitations for automobiles, so throughout the chapter we use the same limitations as in 2021 for 2022 **SS,000 additional depreciation is allowed when bonus depreciation is claimed [5168(k)(2)(F))