1. Sequoia purchased the rights to cut timber on several tracts of land over a fifteen-year period. It paid $510,000 for cutting rights. A timber engineer estimates that 510,000 board feet of timber will be cut. During the current year, Sequoia cut 55,000 board feet of timber, which it sold for $910,000. What is Sequoia's cost depletion expense for the current year?

2. Anne is a self-employed electrician who reports her business income using the accrual method over a calendar year. On September 1st of this year Anne paid $2,420 of interest on a loan. The interest accrues evenly over 20 months ($121 per month) from June 1st of this year through December 31st of next year. In addition, on September 1st Anne also paid $2,869 for 19 months of professional liability insurance ($151 per month). What amount of interest and insurance can Anne deduct this year?