A residence was constructed in 1986 for $72,000 on a lot that cost $14,000. Before the property was converted to rental use in the current year, a finished porch costing $8,000 was added and a $3,000 casualty loss was claimed. If the fair market value on the date of conversion to rental use was $84,000 ($74,000 for the house and $10,000 allocated for the land), what is the depreciable basis?

• A.$84,000
• B.$74,000
• C.$72,000
• D.$77,000

During the current year, Liquid Corporation, a calendar-year taxpayer, purchased and placed in service the following assets on the following dates:

Machine	$ 6,400	February 1
Truck	20,000	October 15
Computer	8,000	December 1

The three assets are all 5-year property under MACRS. The Sec. 179 and bonus depreciation deductions were not elected. What is Liquids depreciation deduction?

• A.$1,720
• B.$3,440
• C.$6,880
• D.$3,640