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 2015:

*Not considered a luxury automobile, thus not subject to the luxury automobile limitations

During 2015, 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 acquired during 2016:

†Used 100% for business purposes. .

TM generated taxable income in 2016 before any §179 expense of $732,500.

Required

a. Compute the maximum 2015depreciation deductions including §179 expense (ignoring bonus depreciation).

b. Compute the maximum 2016 depreciation deductions including §179 expense (ignoring bonus depreciation).

c. Compute the maximum 2016 depreciation deductions including §179 expense, but now assume that Steve would like to take bonus depreciation.

d. Ignoring part c, now assume that during 2016, Steve decides to buy a competitor’s assets for a purchase price of $350,000. Compute the maximum 2016 cost recovery including §179 expense (ignoring bonus depreciation). Steve purchased the following assets for the lump-sum purchase price.

e. Complete Part I of Form 4562 for part b (use the most current form available).

Asset Inventory Office furniture Machinery Patent Goodwill Building Cost $20,000 30,000 50,000 98,000 2,000 130,000 20,000 Date Placed in Service 09/15/2016 09/15/2016 09/15/2016 09/15/2016 09/15/2016 09/15/2016 09/15/2016 an