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Posted on Jun 14, 2024

Hi, the first part is the summary that came along with my question. After the summary follows the question and under the question are all

Hi, the first part is the summary that came along with my question. After the summary follows the question and under the question are all of the MAKERS tables needed to answer this question.

Thank you!

Summary of Question: "On November 22 of year 1 Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of the purchase was $1,692,500; $360,000 was allocated to the basis of the land and the remaining $1,332,500 was allocated to the basis of the building. (UseMACRSTable 1,Table 2,Table 3,Table 4andTable 5.)(Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)"

Question: "a.Using MACRS, what is Javier's depreciation deduction on the building for years 1 through 3?"

The following tables are MACRS tables from my text book.

Table 1 MACRS Half-Year Convention Depreciation Rate for Recovery Period 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1 33.33% 20.00% 14.29% 10.00% 5.00% 3.750% Year 2 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 5.76 8.92 7.37 6.23 5.285 Year 7 8.93 6.55 5.90 4.888 Year 8 4.46 6.55 5.90 4.522 Year 9 6.56 5.91 4.462 Year 10 6.55 5.90 4.461 Year 11 3.28 5.91 4.462 Year 12 5.90 4.461 Year 13 5.91 4.462 Year 14 5.90 4.461 Year 15 5.91 4.462 Year 16 2.95 4.461 Year 17 4.462 Year 18 4.461 Year 19 4.462 Year 20 4.461 Year 21 2.231TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 35.00% 25.00% Year 2 26.00 21.43 Year 3 15.60 15.31 Year 4 11.01 10.93 Year 5 11.01 8.75 Year 6 1.38 8.74 Year 7 8.75 Year 8 1.09 TABLE 2b MACRS Mid-Quarter Convention: For property placed in service during the second quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 25.00% 17.85% Year 2 30.00 23.47 Year 3 18.00 16.76 Year 4 11.37 11.97 Year 5 11.37 8.87 Year 6 4.26 8.87 Year 7 8.87 Year 8 3.34 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 15.00% 10.71%Year 5 11.37 8.87 Year 6 4.26 8.87 Year 7 8.87 Year 8 3.34 TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 15.00% 10.71% Year 2 34.00 25.51 Year 3 20.40 18.22 Year 4 12.24 13.02 Year 5 11.30 9.30 Year 6 7.06 3.85 Year 7 8.86 Year 8 5.53 TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter Depreciation Rate for Recovery Period 5-Year 7-Year Year 1 5.00% 3.57% Year 2 38.00 27.55 Year 3 22.80 19.68 Year 4 13.68 14.06 Year 5 10.94 10.04 Year 6 9.58 8.73 Year 7 8.73 Year 8 7.64TABLE 3 Residential Rental Property Mid-Month Cour-lion Straight Line27.5 Years Month Property Placed in Sen-ice Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month '1' Month 3 Month 9 Month 13 Month 11 Month 12 Year 1 3.435% 3.132% 2.3?9% 2.5?6% 2.273% 1.970% 1.667% 1.364% 1.061% 0.?5 3% 0.455% 0.152% Year 2-9 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 Year 13 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 11 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 12 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 13 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 1-1 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 15 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 16 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 1? 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 13 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 19 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 2!} 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 21 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 22 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 23 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 24 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 25 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 26 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? 3.636 3.636 3.636 3.636 3.636 3.636 Year 27 3.636 3.636 3.636 3.636 3.636 3.636 3.63? 3.63? 3.63? 3.63? 3.63? 3.63? Year 23 1.9? 2.2?3 2576 2.379 3.132 3.485 3.636 3.636 3.636 3.636 3.636 3.636 Year 29 11.152 6.455 6.?53 1.061 1.364 1.66? TABLE 4 Nonresidential Real Property Mid-Month Convention Straight Line-31.5 Years (for assets placed in service before May 13, 1993) Month Property Placed in Service Month 2 Month 3 Month 4 Month 5 Month 7 Month 8 Month 10 Month 11 Month 12 Year 1 2.778% 2.513% 2.249% 1.720% 1.455% 1.190% 0.926% 0.661% 0.132% Year 2-7 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 Year 8 3.175 3.174 3.175 3.174 3.174 3.175 3.175 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.174 Year 11 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.174 Year 13 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 Year 14 3.174 3.175 3.174 3.174 3.175 3.174 3.174 3.174 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 Year 15 3.174 3.175 Year 16 3.174 3.175 3.174 3.174 3.175 3.174 3.174 3.175 3.174 Year 17 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.174 3.175 3.174 Year 18 Year 19 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.174 Year 20 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.175 Year 21 3.174 3.175 Year 22 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.175 3.174 3.175 Year 23 3.174 3.175 3.174 3.175 3.175 3.174 3.115 3.174 3.175 3.174 Year 24 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.175 3.174 Year 23 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.174 Year 26 3.175 3.174 3.175 3.174 3.174 3.175 Year 27 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 Year 28 3.175 3.174 3.175 3.174 3.174 3.175 3.175 3.174 3.175 3.174 Year 29 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 3.174 3.175 Year 30 3.175 3.174 3.175 3.174 3.174 3.175 3.174 3.175 3.175 3.174 3.175 Year 31 3.174 3.175 3.174 3.175 3.175 3.174 3.175 3.174 3.174 Year 32 1.720 1.984 2.513 2.778 3.042 3.175 3.174 3.175 0.132 1.190 1.455 Year 33 0.661TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line-39 Years (for assets placed in service on or after May 13, 1993) Month Property Placed in Service Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 2.461% 2.247% 2.033% 1.819% 1.605% 1.391% 1.177% 0.963% 0.749% 0.535% 0.321% 0.107% Year 2-39 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 Year 40 0.107 0.321 0.535 0.749 0.963 1.177 1.391 1.605 1.819 2.033 2.247 2.461EXHIBIT 10-6 Mid-Quarter Convention Percentage of Full-Year's Depreciation in Year of Disposition Quarter of Disposition Percentage Calculation* Ist 12.5% 1.5/12 2nd 37.5 4.5/12 3rd 62.5 7.5/12 4th 87.5 10.5/12 *The calculation is the number of months the taxpayer held or is deemed to have held the asset in the year of disposition divided by 12 months in the year