Problem 14-75 (a) (LO. 8, 10) On September 3, 2017, Ivory Company acquired an apartment building for $1,500,000 (with $300,000 being allocated to the land). The straight-line cost recovery method was used. The property was sold on September 30, 2020, for $1,400,000. Click here to access the Exhibit for MACRS Straight-Line Depreciation for Real Property. If an amount is zero, enter "0". Do not round cost recovery factors. Round the total cost recovery deduction to the nearest dollar. a. Compute the cost recovery and adjusted basis for the building. The cost recovery is $ 99,841 x, and the adjusted basis for the building is $ 399,842 X. Feedback Check My Work Generally, 1250 property is depreciable real property (principally buildings and their structural components) that is not subject to 1245. Intangible real property, such as leaseholds of 1250 property, is also included. b. What are the amount and nature of Ivory's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured 1250 gain? There is $ 10,158 X of recognized gain on the sale of the property, of which $ o is subject to $ 1250 recapture. Exhibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* (Percentage Rates) For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Year(s) 7 10 2.879 2.576 2 3 4 6 8 11 1 2-18 19-27 28 29 1 3.485 3.636 3.637 1.970 0.000 3.182 3.636 3.637 2.273 0.000 3.636 3.637 2.576 0.000 3.636 3.637 2.879 0.000 5 2.273 3.636 3.637 3.182 0.000 1.970 3.636 3.637 3.485 0.000 1.667 3.636 3.637 3.636 0.152 1.364 3.636 3,637 3.636 0.455 9 1.061 3.636 3.637 3.636 0.758 0.758 3.636 3.637 3.636 1.061 0.455 3.636 3.637 3.636 1.364 12 0.152 3.636 3.637 3.636 1.667 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 1 3.042 2.778 2.513 2.249 1.984 1.720 1.455 1.190 0.926 0.661 0.397 0.132 2-19 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3.175 20-31 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.175 3.175 3.175 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.000 0.132 0.397 0.661 0.926 1.190 1.455 For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service): Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 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 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 40 0.107 0.321 0.535 0.749 0.963 1.177 1.391 1.605 2.247 2.461 1.819 2.033 *The official tables contain a separate row for each year. For ease of presentation, certain years are grouped in these tables. In some instances, this will produce a difference of .001 for the last digit when compared with the official tables