On June 1, 2018, Skylark Enterprises, a calendar year LLC reporting as a sole proprietorship acquired a retail store building for $500,000 (with $100,000 being allocated to the land). The store building was 39-year real property, and the straight-line cost recovery method was used. The property was sold on June 21, 2022, for $385,000.

Click here to access EXHIBIT 8.8 MACRS Straight-Line Depreciation for Real Property.

Carry all cost recovery rates out to five decimal places. Round the total cost recovery deduction to the nearest dollar.

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a. Compute the cost recovery and adjusted basis for the building. Total cost recovery is $fill in the blank 6b2d35ffd019fba_1, and the adjusted basis for the building is $fill in the blank 6b2d35ffd019fba_2.

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b. What are the amount and nature of Skylark's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured 1250 gain? There is $fill in the blank 263859032f83fcb_1 of recognized

gainloss

on the sale of the property, of which

all50%none

is subject to 1250 recapture.