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 5179 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. (Use MACRS Table 1. Table 2. Table 3. Table 4. Table 5, and Exhibit 10-10.) (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) Required: a. Compute the maximum 2020 depreciation deductions, including $179 expense (ignoring bonus depreciation). Apply $179 in order to maximize 2020 depreciation deduction. Description Cost $179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction $ $ 370,000 OO Office furniture Machinery Used delivery truck Total 1,604,000 84,000 2,058,000 $ 0 0 0 0 $ 0 $ 0 $ 0 $ Required: b. Compute the maximum 2021 depreciation deductions, including $179 expense (ignoring bonus depreciation). Apply $179 in order to maximize 2021 depreciation deduction. Description Cost Section 179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction $ 0 $ 0 0 0 2020 Assets Office furniture Machinery Used delivery truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 0 0 0 0 S 0 S 0 S 0 $ 0 S 0 EXHIBIT 10-10 Automobile Depreciation Limits Recovery Year 1 2 3 4 and after 2021* 10.100** 16,100 9,700 5,760 Year Placed in Service 2020 2019 10,100** 10,100** 16,100 16,100 9,700 9,700 5,760 5,760 2018 10,000** 16,000 9,600 5,760 *As of press date, the IRS had not released the 2021 limitations for automobiles, so throughout the chapter we use the same limitations as in 2020 for 2021. **$8,000 additional depreciation is allowed when bonus depreciation is claimed ($168(k)(2)(F))