3) If Jim owned a home for the last 5 years and used it as a personal residence for the first year, rented it out for the next 3 years, and then moved back in for the last year, the exclusion would be reduced by 3/5 for the period of nonqualified use. Thus, if Jim has a gain of $100,000 on the sale, A) he can exclude only 2/5 of it from his gross income, or $40,000, and must recognize the other $60,000. B) he must include all of the gain in his income C) he can exclude the entire $100,000 D) none of the above are correct 4) Assume that the client purchases an office building on 11/1/X1 for $500,000, which includes land with a value of $32,000. The cost of the building itself is $500,000 - $32,000 = $468,000, and this is recovered over a 39-year period, resulting in MACRS deductions of $468,000 / 39 years = $12,000 per year. In 20X1, the year of acquisition, the property is treated as having been purchased in the middle of November, so that only 1 months of depreciation are claimed that year. What is the amount of the depreciation deduction for 20X1? A. $1,000 B. $1,500 C. $12,000 D. $6,000