[The following information applies to the questions displayed below.] Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2017. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2017 Date Placed in Service 02/03/2017 07/22/2017 08/17/2017 Asset Cost Office furniture Machinery Used delivery truck* $ 150,000 1,560,000 40,000 Not considered a luxury automobile During 2017, Kara ne was very successful (and had no 179 limitations) and decided to acquire more assets this next year to increase its production capacity. These are the assets acquired during 2018 Date Placed in Service 03/31/2018 05/26/2018 08/15/2018 11/13/2018 Asset Cost Computers & info. system Luxury autot Assembly equipment storage building $ 400,000 80,000 1,200,000 700,000 tused 100% for business purposes Karane generated taxable income in 2018 of $1,732,500 for purposes of computing the 179 expense. (Use MACRS Table 1 , Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Assume the 2017 179 limits are the same as those in 2018. (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) a. Compute the maximum 2017 depreciation deductions including 179 expense (ignoring bonus depreciation. Current MACRS Depreciation Total Description Cost S179 Expense MACRS Basis M Depreciation Deduction Office furniture Machinery Delivery truck Totals 0 S o S Compute the maximum 2018 depreciation deductions including 179 expense (ignoring bonus depreciation) Sec. 179 Expense Current MACRS Depreciation Total Depreciation Deduction Description Cost MACRS Basis 2017 Assets Office furniture Machinery Used delivery truck 2018 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building Totals 0 $ Compute the maximum 2018 depreciation deductions including S179 expense, but now assume that Karane would like to take bonus depreciation. Total Depreciation Current Sec. 179 Expense Description Cost Bonus MACRS B asis MACRS Depreciation Deduction 2017 Assets Office furniture Machinery Used delivery truck 2018 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building 0 Totals Now assume that during 2018, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2018 cost recovery including 5179 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.) Date Placed in Service 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 Asset Cost Inventory Office furniture Machinery Patent Goodwi1l Building Land $220,000 230,000 250,000 198,000 2,000 430,000 20,000 Sec. 179 Expense Current MACRS Depreciation Total Depreciation Deduction Description Cost Bonus MACRS Basis 2017 Assets Office furniture Machinery Used delivery truck 2018 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building 0 Inventory Office Furniture Machinery Patent Goodwill Building Land 0 0 0 0 Totals 4562 Page 1 Form 4562 Depreciation and Amortization (Including Information on Listed Property) OMB No. 1545-0172 2017 Department of the Treasury Internal Revenue Servce Name(s) shown on return See separate instructions Attach to your tax return Attachment Sequence No. 179 ldentifying number (Enter as xxx-xx-xxxx) Business or activity to which this form relates Part l Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part 1 2 3 4 5 Maximum amount (see instructions) Total Cost of section 179 property placed in service (see instructions) Threshold cost of section 179 property before reduction in limitation (see instructions) Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter-0- Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter-0. If married filing separately, see instructions (b) Cost (business use) (a) Description of property (c) Elected cost 7 Listed property. Enter the amount from line 29 (this form) 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 9 Tentative deduction. Enter the smaller of line 5 or line 8 10 Carryover of disallowed deduction from line 13 of your 2016 Form 4562 11 Business income limitation. Enter the smaller of business income inot less than zero) or line 5 (see instructions) 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 13 Carryover of disallowed deduction to 2018. Add lines 9 and 10, less line 12 10 12 [The following information applies to the questions displayed below.] Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2017. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2017 Date Placed in Service 02/03/2017 07/22/2017 08/17/2017 Asset Cost Office furniture Machinery Used delivery truck* $ 150,000 1,560,000 40,000 Not considered a luxury automobile During 2017, Kara ne was very successful (and had no 179 limitations) and decided to acquire more assets this next year to increase its production capacity. These are the assets acquired during 2018 Date Placed in Service 03/31/2018 05/26/2018 08/15/2018 11/13/2018 Asset Cost Computers & info. system Luxury autot Assembly equipment storage building $ 400,000 80,000 1,200,000 700,000 tused 100% for business purposes Karane generated taxable income in 2018 of $1,732,500 for purposes of computing the 179 expense. (Use MACRS Table 1 , Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Assume the 2017 179 limits are the same as those in 2018. (Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.) a. Compute the maximum 2017 depreciation deductions including 179 expense (ignoring bonus depreciation. Current MACRS Depreciation Total Description Cost S179 Expense MACRS Basis M Depreciation Deduction Office furniture Machinery Delivery truck Totals 0 S o S Compute the maximum 2018 depreciation deductions including 179 expense (ignoring bonus depreciation) Sec. 179 Expense Current MACRS Depreciation Total Depreciation Deduction Description Cost MACRS Basis 2017 Assets Office furniture Machinery Used delivery truck 2018 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building Totals 0 $ Compute the maximum 2018 depreciation deductions including S179 expense, but now assume that Karane would like to take bonus depreciation. Total Depreciation Current Sec. 179 Expense Description Cost Bonus MACRS B asis MACRS Depreciation Deduction 2017 Assets Office furniture Machinery Used delivery truck 2018 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building 0 Totals Now assume that during 2018, Karane decides to buy a competitor's assets for a purchase price of $1,350,000. Compute the maximum 2018 cost recovery including 5179 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.) Date Placed in Service 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 09/15/2018 Asset Cost Inventory Office furniture Machinery Patent Goodwi1l Building Land $220,000 230,000 250,000 198,000 2,000 430,000 20,000 Sec. 179 Expense Current MACRS Depreciation Total Depreciation Deduction Description Cost Bonus MACRS Basis 2017 Assets Office furniture Machinery Used delivery truck 2018 Assets Computers & Info. System Luxury Auto Assembly Equipment Storage Building 0 Inventory Office Furniture Machinery Patent Goodwill Building Land 0 0 0 0 Totals 4562 Page 1 Form 4562 Depreciation and Amortization (Including Information on Listed Property) OMB No. 1545-0172 2017 Department of the Treasury Internal Revenue Servce Name(s) shown on return See separate instructions Attach to your tax return Attachment Sequence No. 179 ldentifying number (Enter as xxx-xx-xxxx) Business or activity to which this form relates Part l Election To Expense Certain Property Under Section 179 Note: If you have any listed property, complete Part V before you complete Part 1 2 3 4 5 Maximum amount (see instructions) Total Cost of section 179 property placed in service (see instructions) Threshold cost of section 179 property before reduction in limitation (see instructions) Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter-0- Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter-0. If married filing separately, see instructions (b) Cost (business use) (a) Description of property (c) Elected cost 7 Listed property. Enter the amount from line 29 (this form) 8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7 9 Tentative deduction. Enter the smaller of line 5 or line 8 10 Carryover of disallowed deduction from line 13 of your 2016 Form 4562 11 Business income limitation. Enter the smaller of business income inot less than zero) or line 5 (see instructions) 12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 13 Carryover of disallowed deduction to 2018. Add lines 9 and 10, less line 12 10 12