1. (make sure you know what date to use) On August 4, 2020, William purchased a new office building for $3,600,000. On October 2, 2020, he began to rent out office space in the building. On July 23, 2024, he sold the office building.

Determine the cost recovery deduction for 2020.

Determine the cost recovery deduction for 2024.

2. Jessica Company reports gross income of $781,000 and other property-related expenses of $507,650 and uses a depletion rate of 18%.

Calculate the depletion allowance for the current year using the percentage depletion method.