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On November 4, 2015, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2015 and 2016, respectively,
On November 4, 2015, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2015 and 2016, respectively, Blue took $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the wrong percentages (i.e, those for 39-year rather than 27.5-year assets). Blue should have taken $910 and $7,272 cost recovery in 2015 and 2016, respectively. On January 1, 2017, the asset was sold for $180,000. Enter the values for each item below. If required, round all computations to the nearest dollar. Click here to access the depreciation tables in the textbook. a. The adjusted basis of the asset at the end of 2016 is $ b. The cost recovery deduction for 2017 is $ c. The losson the sale of the asset in
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