36, Compute outside basis and amount reported on 1040 for 2017 Facts: In 2016 Alice bought a very expensive embroidering machine and opened an embroidery shop. She paid 750,000 for the machine and because of limits on MACRS, section 179 and bonus depreciation, she could only write off 675,000 in 2016. She realized she could not operate the machine properly and could not run a shop. She contacted Betty who worked a similar machine and was very good at it and Clair who was a great organizer and salesperson. They agreed to form a partnership starting January 1, 2017