On April 23, Mrs. Y purchased a taxi business from Mr. M for a $58,000 lump-sum price. The business consisted of a two-year-old taxicab worth $18,560, Mr. Ms license to operate a taxi business in Baltimore, his list of regular customers, and his registered business name On Time Any Time Taxi. Mrs. Y operated the business from April 24 through the end of the year. Use Table 7-2.

1. Compute Mrs. Ys taxable income from the taxi business if her taxable income before any cost recovery deductions was $37,100. Assume Mrs. Y wants to minimize taxable income.
2. Compute Mrs. Ys taxable income from the taxi business if her taxable income before any cost recovery deductions was $17,800. Assume Mrs. Y wants to minimize taxable income without bonus depreciation.