Required information Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) (Algo) [The following information applies to the questions displayed below.] 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 : Not considered a luxury automobile. During 2021. Karane was very successful (and had no 5179 limitations) and decided to acquire more assets in 2022 to increase its production capacity. These are the assets acquired during 2022: "Used 100% for business purposes. Karane generated taxable income in 2022 of $1,790,000 for purposes of computing the 5179 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 (Alqo) Compute the maximum 2021 depreciation deductions, including $179 expense (ignoring bonus depreciation) b. Compute the maximum 2022 depreciation deductions, including $179 expense (ignoring bonus depreciation). c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. d. Now assume that during 2022. Karane decides to buy a competitor's assets for a purchase price of $1,625,540, Compute the maximum 2022 cost recovery, including 5179 expense and bonus depreciation. Karane purchased the following assets for the lumpsum purchase price: Note: Round your final answers to the nearest whole dollar amount. Assume that Karane takes the maximum section 179 expense for the Assembly Equipment. Table 1 MACRS Half-Year Convention ABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter ABLE 2b MACRS Mid-Quarter Convention: For property placed in service during the second quarter TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth TABLE 3 Residential Rental Property Mid-Month Convention Straight Line - 27.5 Years TMBLE 4 Nonresidential Real Property Mid-Month Convention Straight Line-31 3 Years (for assets placed in service before May 13, 1993) TABL.E 5 Nonresddential Real Property Mid-Month Convention Straight Line-39 Vears (for assets placed in service oa or after May 13, 1993) EXHIBIT 10-10 Automobile Depreciation Limits is of press date, the IRS had not released the 2022 limitations for automobiles, so throughout the chapter we use the same limitarions as in 2021 for 2022. $8,000 additional depreciation is allowed when bonus depreciation is claimed ($68(k)(2)(F)]. Required information Comprehensive Problem 10-76 (LO 10-1, LO 10-2, LO 10-3, LO 10-4, LO 10-5) (Algo) [The following information applies to the questions displayed below.] 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 : Not considered a luxury automobile. During 2021. Karane was very successful (and had no 5179 limitations) and decided to acquire more assets in 2022 to increase its production capacity. These are the assets acquired during 2022: "Used 100% for business purposes. Karane generated taxable income in 2022 of $1,790,000 for purposes of computing the 5179 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 (Alqo) Compute the maximum 2021 depreciation deductions, including $179 expense (ignoring bonus depreciation) b. Compute the maximum 2022 depreciation deductions, including $179 expense (ignoring bonus depreciation). c. Compute the maximum 2022 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. d. Now assume that during 2022. Karane decides to buy a competitor's assets for a purchase price of $1,625,540, Compute the maximum 2022 cost recovery, including 5179 expense and bonus depreciation. Karane purchased the following assets for the lumpsum purchase price: Note: Round your final answers to the nearest whole dollar amount. Assume that Karane takes the maximum section 179 expense for the Assembly Equipment. Table 1 MACRS Half-Year Convention ABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter ABLE 2b MACRS Mid-Quarter Convention: For property placed in service during the second quarter TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth TABLE 3 Residential Rental Property Mid-Month Convention Straight Line - 27.5 Years TMBLE 4 Nonresidential Real Property Mid-Month Convention Straight Line-31 3 Years (for assets placed in service before May 13, 1993) TABL.E 5 Nonresddential Real Property Mid-Month Convention Straight Line-39 Vears (for assets placed in service oa or after May 13, 1993) EXHIBIT 10-10 Automobile Depreciation Limits is of press date, the IRS had not released the 2022 limitations for automobiles, so throughout the chapter we use the same limitarions as in 2021 for 2022. $8,000 additional depreciation is allowed when bonus depreciation is claimed ($68(k)(2)(F)]
