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

TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter

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
Year 8		5.53

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 Line27.5 Years

Month Property Placed in Service
	Month 1	Month 2	Month 3	Month 4	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 16	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 24	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	3.182	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

Required information (The following information applies to the questions displayed below.] Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2019. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2019: Asset Office furniture Machinery Used delivery truck* Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2019 07/22/2019 08/17/2019 *Not considered a luxury automobile. During 2019, Karane was very successful (and had no $179 limitations) and decided to acquire more assets in 2020 to increase its production capacity. These are the assets acquired during 2020: Asset Computers & info. system Luxury autot Assembly equipment Storage building Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2020 05/26/2020 08/15/2020 11/13/2020 fUsed 100% for business purposes. Karane generated taxable income in 2020 of $1,732,500 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.) d. Now assume that during 2020, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2020 cost recovery, including $179 expense and bonus depreciation. Karane purchased the following assets for the lump- sum purchase price: (Round your final answers to the nearest whole dollar amount.) Asset Inventory Office furniture Machinery Patent Goodwill Building Land Cost $220,000 230,000 250,000 198,000 2,000 430,000 20,000 Date Placed in Service 09/15/2020 09/15/2020 09/15/2020 09/15/2020 09/15/2020 09/15/2020 09/15/2020 Description Cost Sec. 179 Expense Bonus MACRS Basis Current MACRS Depreciation Current Amortization Total Cost Recovery Deduction $ 2019 Assets Office Furniture Machinery Used Delivery Truck 0 0 0 2020 Assets Computers & Info System Luxury Auto Assembly Equipment Storage Building 0 0 0 0 0 Inventory Office Furniture Machinery Patent Goodwill Building Land 0 0 0 0 Totals $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Required information (The following information applies to the questions displayed below.] Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2019. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2019: Asset Office furniture Machinery Used delivery truck* Cost $ 150,000 1,560,000 40,000 Date Placed in Service 02/03/2019 07/22/2019 08/17/2019 *Not considered a luxury automobile. During 2019, Karane was very successful (and had no $179 limitations) and decided to acquire more assets in 2020 to increase its production capacity. These are the assets acquired during 2020: Asset Computers & info. system Luxury autot Assembly equipment Storage building Cost $ 400,000 80,000 1,200,000 700,000 Date Placed in Service 03/31/2020 05/26/2020 08/15/2020 11/13/2020 fUsed 100% for business purposes. Karane generated taxable income in 2020 of $1,732,500 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.) d. Now assume that during 2020, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2020 cost recovery, including $179 expense and bonus depreciation. Karane purchased the following assets for the lump- sum purchase price: (Round your final answers to the nearest whole dollar amount.) Asset Inventory Office furniture Machinery Patent Goodwill Building Land Cost $220,000 230,000 250,000 198,000 2,000 430,000 20,000 Date Placed in Service 09/15/2020 09/15/2020 09/15/2020 09/15/2020 09/15/2020 09/15/2020 09/15/2020 Description Cost Sec. 179 Expense Bonus MACRS Basis Current MACRS Depreciation Current Amortization Total Cost Recovery Deduction $ 2019 Assets Office Furniture Machinery Used Delivery Truck 0 0 0 2020 Assets Computers & Info System Luxury Auto Assembly Equipment Storage Building 0 0 0 0 0 Inventory Office Furniture Machinery Patent Goodwill Building Land 0 0 0 0 Totals $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0