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. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

a. Using MACRS, what is Javiers depreciation expense on the building for years 1 through 3?

Year Depreciation expense

1

2

3

b. What would be the year 3 depreciation expense if the building was sold on March 4 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 October 4 instead of November 22. Year Depreciation expense 1 2 3 d. Answer the question in part (a), except assume that the building is residential property. Year Depreciation expense 1 2 3

e. e. What would be the depreciation for 2016, 2017, and 2018 if the property were nonresidential property purchased and placed in service November 22, 1999 (assume the same original basis)? Year Depreciation 2016 2017 2018