1) Brandy Corporation, a calendar-year, accrual-basis taxpayer, signed a contract on December 27, 2013, for the installation of a new central air conditioning unit. Because of various shipping delays, the unit was not installed until October 21, 2014 and was never used that year. The unit was first used on March 28, 2015. For purposes of determining MACRS recovery deductions, what year was the unit placed in service? Explain.

2) Property owned by Ellwood Inc., was condemned by the City of Denver so that the city could build a new middle school on the property. The property was used to sell and repair autos and consisted of a sales office, a display lot, and an auto repair shop. The FMV of the property was set at 1 million. Upon receipt of the cash, the corporation invested the proceeds in a strip retail center. Will the replacement property qualify for like exchange treatment under Code Sec. 1033?