Karl Inc. purchased only the following properties in Year 1.

(1) Machine A of $1,100,000 used for business on Jan 1

(2) Machine B of $1,200,000 used for business on Oct 10 Questions:

a) What is the maximum CRA for Machine A in Year 1?

b) What is the maximum CRA for Machine A in Year 2?

c) What is the maximum CRA for Machine B in Year 1?

d) What is the maximum CRA for Machine B in Year 2?

Quick Reference Tables 1 Half-Year Averaging Convention Recovery Year auWN- MACRS Rates 5-Year 20.00% 32.00 19.20 11.52 11.52 5.76 7-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 Mid-Quarter Averaging Convention 4th Quarter DUWN-2 1* Quarter 35.00% 26.00 15.60 11.01 11.01 1.38 5.00% 38.00 22.80 13.68 10.94 9.58 5-Year Property 2nd Quarter 3rd Quarter 25.00% 15.00% 30.00 34.00 18.00 20.40 11.37 12.24 11.37 11.30 4.26 7.06 7-Year Property 2nd Quarter 3 Quarter 17.85% 10.71% 23.47 25.51 16.76 18.22 11.97 13.02 8.87 9.30 8.87 8.85 8.87 8.86 3.33 5.53 Year "Quarter 4 Quarter "Quarter 25.00% 21.43 15.31 10.93 8.75 8.74 8.75 1.09 3.57% 27.55 19.68 14.06 10.04 8.73 8.73 7.64 Mid-Month Convention Month Year 29 no 271-Year Residential Rental Property Year 1 Years 2-18 Years 19-27 3.485% 3.636% 3.637% 3.182 3.636 3.637 2.879 3.636 3.637 2.576 3.636 3.637 2.273 3.636 3.637 1.970 3.636 3.637 1.667 3.636 3.637 1.364 3.636 3.637 1.061 3.636 3.637 0.758 3.636 3.637 0.455 3.637 Year 28 1.970% 2.273 2.576 2.879 3.182 3.485 3.636 3.636 3.636 3.636 3.636 0.152% 0.455 0.758 1.061 1.364 3.636 39-Year Nonresidential Real Property Month Year 1 Years 2-39 Year 40 2.461% 2.564% 0.107% 2.247 2.564 0.321 2.033 2.564 0.535 1.819 2.564 0.749 1.605 2.564 0.963 1.391 2.564 1.177 1.177 2.564 1.391 0.963 2.564 1.605 0.749 2.564 1.819 10 0.535 2.564 2.033 11 0.321 2.564 2.247 Quick Reference Tables 1 Half-Year Averaging Convention Recovery Year auWN- MACRS Rates 5-Year 20.00% 32.00 19.20 11.52 11.52 5.76 7-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 Mid-Quarter Averaging Convention 4th Quarter DUWN-2 1* Quarter 35.00% 26.00 15.60 11.01 11.01 1.38 5.00% 38.00 22.80 13.68 10.94 9.58 5-Year Property 2nd Quarter 3rd Quarter 25.00% 15.00% 30.00 34.00 18.00 20.40 11.37 12.24 11.37 11.30 4.26 7.06 7-Year Property 2nd Quarter 3 Quarter 17.85% 10.71% 23.47 25.51 16.76 18.22 11.97 13.02 8.87 9.30 8.87 8.85 8.87 8.86 3.33 5.53 Year "Quarter 4 Quarter "Quarter 25.00% 21.43 15.31 10.93 8.75 8.74 8.75 1.09 3.57% 27.55 19.68 14.06 10.04 8.73 8.73 7.64 Mid-Month Convention Month Year 29 no 271-Year Residential Rental Property Year 1 Years 2-18 Years 19-27 3.485% 3.636% 3.637% 3.182 3.636 3.637 2.879 3.636 3.637 2.576 3.636 3.637 2.273 3.636 3.637 1.970 3.636 3.637 1.667 3.636 3.637 1.364 3.636 3.637 1.061 3.636 3.637 0.758 3.636 3.637 0.455 3.637 Year 28 1.970% 2.273 2.576 2.879 3.182 3.485 3.636 3.636 3.636 3.636 3.636 0.152% 0.455 0.758 1.061 1.364 3.636 39-Year Nonresidential Real Property Month Year 1 Years 2-39 Year 40 2.461% 2.564% 0.107% 2.247 2.564 0.321 2.033 2.564 0.535 1.819 2.564 0.749 1.605 2.564 0.963 1.391 2.564 1.177 1.177 2.564 1.391 0.963 2.564 1.605 0.749 2.564 1.819 10 0.535 2.564 2.033 11 0.321 2.564 2.247