1) During the current year, an office desk used by Pat in his business was completely destroyed by a fire. The adjusted basis of the desk was $900 (original cost of $1,500 less accumulated depreciation of $600). Pat received $500 from his insurance company, but he did not replace the desk.

a. What is the amount of Pat's recognized gain or loss (deduction) as a result of the casualty?

b. Assuming this is Pat's only casualty gain or loss for the year, what is the nature of the gain or loss?

2) On October 21, 2019, Jay purchased a commercial building. The cost basis assigned to the building is $700,000. Jay also owns a residential apartment building he purchased on June 15, 2018 with a cost basis of $500,000.

a.	Calculate Jay's total depreciation deduction for the buildings for 2019, using MACRS.
b.	Calculate Jay's total depreciation deduction for the commercial building for 2020, using MACRS.