Be You Sailing Corporation put 3 boat vessels into service this year. The asset life according to the IRS is 7 years for each. The first boat was placed into service in Month 1 when Joe contributed it to form the corporation in Scenario 2. The following provides information about each boat. Calculate the depreciation for each boat in year 1 and the total depreciation.

ASSET	Placed in Service	Cost Basis	Year 1 Depreciation
Joe's Boat	Day 1 - at formation	$250,000	?
Sunshine	Month 2	$1,000,000	?
Clear Sky	Month 6	$700,000	?

What would have happened if the last two boats were not added until the 10^th and 12^th month of Year 1?

a. The corporation would have been required to take the 179 election.

b. The depreciation calculated in 26 and 27 would have been divided by 3 and only one third of the years depreciation would be allowed.

c. The corporation could have held the assets and not started depreciation till Year 2.

d. The mid-quarter convention would apply, and only half of the last quarters deprecation would be taken in the first and last year of life (or disposition) of those assets placed in service.