Question
On March 18 of year 1 Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of
On March 18 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 $1,453,500; $396,000 was allocated to the basis of the land and the remaining $1,057,500 was allocated to the basis of the building. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
a. Using MACRS, what is Javiers depreciation expense on the building for years 1 through 3?
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b. What would be the year 3 depreciation expense if the building was sold on May 28 of year 3?
Year 3 depreciation expense: __________
c. Answer the question in part (a), except assume the building was purchased and placed in service on January 18 instead of March 18.
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d. Answer the question in part (a), except assume that the building is residential property.
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e. What would be the depreciation for 2017, 2018, and 2019 if the property were nonresidential property purchased and placed in service March 14, 2000 (assume the same original basis)?
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