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Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2020. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2020:

Asset	Cost	Date Placed in Service
Office furniture	$ 220,000	02/03/2020
Machinery	1,574,000	07/22/2020
Used delivery truck*	54,000	08/17/2020

*Not considered a luxury automobile.

During 2020, Karane was very successful (and had no 179 limitations) and decided to acquire more assets in 2021 to increase its production capacity. These are the assets acquired during 2021:

Asset	Cost	Date Placed in Service
Computers and information system	$ 414,000	03/31/2021
Luxury auto	83,500	05/26/2021
Assembly equipment	1,270,000	08/15/2021
Storage building	800,000	11/13/2021

Used 100% for business purposes.

Karane generated taxable income in 2021 of $1,750,000 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.)

a. Compute the maximum 2020 depreciation deductions, including 179 expense (ignoring bonus depreciation).

b. Compute the maximum 2021 depreciation deductions, including 179 expense (ignoring bonus depreciation).

c. Compute the maximum 2021 depreciation deductions, including 179 expense, but now assume that Karane would like to take bonus depreciation.

a. Compute the maximum 2020 depreciation deductions, including 3179 expense (Ignoring bonus depreciation). Answer is complete but not entirely correct. Description Office furniture Machinery Used delivery truck Total Cost $179 Expense $ 370,000 s 0 1,604,000 1,040,000 84,000 X 0 S 2.058,000 $ 1,040,000 MACRS Basis $ 370,000 564,000 84,000 $ 1,018,000 Current Total Cost MACRS Recovery Depreciation Deduction s 52,873 S 52,873 80,596 1,120,596 16,800 x 16,800 S 150,269 $ 1,190.269 b. Compute the maximum 2021 depreciation deductions, including $179 expense (Ignoring bonus depreciation). Description Cost Section 179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction S 0 0 0 2020 Assets Office furniture Machinery Used delivery truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 0 0 0 OO Oo 0 S 01 S 0 $ 0 S 0 S 0 c. Compute the maximum 2021 depreciation deductions, including 3179 expense, but now assume that karane would like to take bonus depreciation. Description Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction S 0 0 0 2020 Assets Office Furniture Machinery Used Delivery Truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 0 0 0 0 S 0 $ 0 S 0 S 0 $ 0 A 0 a. Compute the maximum 2020 depreciation deductions, including 3179 expense (Ignoring bonus depreciation). Answer is complete but not entirely correct. Description Office furniture Machinery Used delivery truck Total Cost $179 Expense $ 370,000 s 0 1,604,000 1,040,000 84,000 X 0 S 2.058,000 $ 1,040,000 MACRS Basis $ 370,000 564,000 84,000 $ 1,018,000 Current Total Cost MACRS Recovery Depreciation Deduction s 52,873 S 52,873 80,596 1,120,596 16,800 x 16,800 S 150,269 $ 1,190.269 b. Compute the maximum 2021 depreciation deductions, including $179 expense (Ignoring bonus depreciation). Description Cost Section 179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction S 0 0 0 2020 Assets Office furniture Machinery Used delivery truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 0 0 0 OO Oo 0 S 01 S 0 $ 0 S 0 S 0 c. Compute the maximum 2021 depreciation deductions, including 3179 expense, but now assume that karane would like to take bonus depreciation. Description Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction S 0 0 0 2020 Assets Office Furniture Machinery Used Delivery Truck 2021 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total 0 0 0 0 S 0 $ 0 S 0 S 0 $ 0 A 0

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