Example

4a

: Dow Chemical purchased a new plant for $4,000,000 on May 15, 2016

. $1,500,000 of the purchase price is allocated to the land the plant is built on while the remainder of the purchase price is

allocated to the plant. What is Dow Chemicals depreciation deduction in 2016?

Example 4b: Assume Dow Chemical added a wing to the plant costing $900,000. How is the addition

treated for tax purposes?

Example

4c

: Assume that Dow Chemical sells the plant on April 12, 2022. What is Dow Chemicals

depreciation deduction in 2022?