McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 62

Back in Boston, Steve has been busy creating and managing his new company, Teton Mountaineering (TM), which is based out of a small town in Wyoming. In the process of doing so, TM has acquired various types of assets. Below is a list of assets acquired during 2010:
*Not considered a luxury automobile, thus not subject to the luxury automobile limitations
During 2010, TM had huge success (and had no §179 limitations and Steve acquired more assets the next year to increase its production capacity. These are the assets which were acquired during 2011:
**Used 100% for business purposes.
TM did extremely well during 2011 by generating a taxable income before any §179 expense of $732,500.
Required
a. Compute 2010 depreciation deductions including §179 expense (ignoring bonus depreciation).
b. Compute 2011 depreciation deductions including §179 expense (ignoring bonus depreciation).
c. Compute 2011 depreciation deductions including §179 expense (ignoring bonus depreciation), but now assume that Steve acquired a new machine on October 2 nd for $400,000 plus $20,000 for delivery and setup costs.
d. Ignoring part c, now assume that during 2011, Steve decides to buy a competitor's assets for a purchase price of $350,000. Steve purchased the following assets for the lump-sum purchase price.
e. Complete Part I of Form 4562 for part b.