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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 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Cost Date Placed in Asset Office furniture Machinery Used delivery truck* Service $ 400,000 1,810,000 90,000 02/03/2022 07/22/2022 08/17/2022 *Not considered a luxury automobile. During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Date Placed in Asset Computers and information system Assembly equipment Luxury auto* Storage building Cost Service $ 450,000 92,500 1,450,000 800,000 03/31/2023 05/26/2023 08/15/2023 11/13/2023 *Used 100% for business purposes. Karane generated taxable income in 2023 of $1,795,000 for purposes of computing the $179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Required: c. Compute the maximum 2023 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation.

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 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Cost Date Placed in Asset Office furniture Machinery Used delivery truck* Service $ 400,000 1,810,000 90,000 02/03/2022 07/22/2022 08/17/2022 *Not considered a luxury automobile. During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Date Placed in Asset Computers and information system Assembly equipment Luxury auto* Storage building Cost Service $ 450,000 92,500 1,450,000 800,000 03/31/2023 05/26/2023 08/15/2023 11/13/2023 *Used 100% for business purposes. Karane generated taxable income in 2023 of $1,795,000 for purposes of computing the $179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Required: c. Compute the maximum 2023 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation.

SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 11P
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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 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Cost Date Placed in Asset Office furniture Machinery Used delivery truck* Service $ 400,000 1,810,000 90,000 02/03/2022 07/22/2022 08/17/2022 *Not considered a luxury automobile. During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Date Placed in Asset Luxury auto* Computers and information system Assembly equipment Storage building *Used 100% for business purposes. Cost Service $ 450,000 92,500 1,450,000 03/31/2023 05/26/2023 08/15/2023 800,000 11/13/2023 Karane generated taxable income in 2023 of $1,795,000 for purposes of computing the $179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Required: c. Compute the maximum 2023 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Note: Round your final answers to nearest whole dollar. Description Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction 2022 Assets Office Furniture Machinery Used Delivery Truck $ 400,000 $ 0 $ 1,810,000 0 0 0 $ 400,000 730,000 $ 90,000 0 0 90,000 97,960 $ 178,777 28,800 97,960 178,777 28,800 2023 Assets Computers and Information System 450,000 0 Luxury Auto 92,500 0 8,000 84,500 12,200 Assembly Equipment 1,450,000 1,160,000 20,200 1,160,000 Storage Building 800,000 0 0 800,000 Total $ 5,092,500 $ 1,160,000 $ 8,000 $2,104,500 $ 2,568 320,305 $ 2,568 1,488,305
Transcribed Image Text: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 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Cost Date Placed in Asset Office furniture Machinery Used delivery truck* Service $ 400,000 1,810,000 90,000 02/03/2022 07/22/2022 08/17/2022 *Not considered a luxury automobile. During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Date Placed in Asset Luxury auto* Computers and information system Assembly equipment Storage building *Used 100% for business purposes. Cost Service $ 450,000 92,500 1,450,000 03/31/2023 05/26/2023 08/15/2023 800,000 11/13/2023 Karane generated taxable income in 2023 of $1,795,000 for purposes of computing the $179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Required: c. Compute the maximum 2023 depreciation deductions, including $179 expense, but now assume that Karane would like to take bonus depreciation. Note: Round your final answers to nearest whole dollar. Description Cost Section 179 Expense Bonus MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction 2022 Assets Office Furniture Machinery Used Delivery Truck $ 400,000 $ 0 $ 1,810,000 0 0 0 $ 400,000 730,000 $ 90,000 0 0 90,000 97,960 $ 178,777 28,800 97,960 178,777 28,800 2023 Assets Computers and Information System 450,000 0 Luxury Auto 92,500 0 8,000 84,500 12,200 Assembly Equipment 1,450,000 1,160,000 20,200 1,160,000 Storage Building 800,000 0 0 800,000 Total $ 5,092,500 $ 1,160,000 $ 8,000 $2,104,500 $ 2,568 320,305 $ 2,568 1,488,305
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