During 2019, Karan acquired the following assets for use in her sole proprietorship:

Asset                                               Cost                   Date Place in Service

Computers & Info. System          $400,000                  03/31

Assembly Equipment                   1,200,000                   08/15

Warehouse 700,000 11/13

a. What is the maximum amount of cost recovery Karen can claim with respect to these assets in 2019?

b. What is each asset’s adjusted basis as of December 31, 2019?

c.   Assume Karan plans to sell the warehouse on May 5, 2021. What will Karan’s adjusted basis in the warehouse be for purposes of determining her gain or loss on the sale?

Answer rating: 100% (QA)

a As per section 179 of the code businesses can immediately deduct up to 1 million for qualifying purchases of capital with a limit of 25 million Busi... View the full answer