Problem 8-4 Modified Accelerated Cost Recovery System (MACRS) (LO 8.2)

On July 8, 2020, Holly purchased a residential apartment building. The cost basis assigned to the building is $750,000. Holly also owns another residential apartment building that she purchased on November 15, 2020, with a cost basis of $410,000.

Click here to access the depreciation tables. Round your answers to the nearest dollar.

a. Calculate Holly's total depreciation deduction for the apartments for 2020 using MACRS. $fill in the blank

b. Calculate Holly's total depreciation deduction for the apartments for 2021 using MACRS. $fill in the blank

Problem 8-4 (Algorithmic) Modified Accelerated Cost Recovery System (MACRS) (LO 8.2)

On October 8, 2020, Holly purchased a residential apartment building. The cost basis assigned to the building is $263,300. Holly also owns another residential apartment building that she purchased on June 15, 2020, with a cost basis of $510,000.

Click here to access the depreciation tables.

If required, round intermediate calculations and final answers to nearest dollar.

a. Calculate Holly's total depreciation deduction for the apartments for 2020 using MACRS. $fill in the blank

b. Calculate Holly's total depreciation deduction for the apartments for 2021 using MACRS. $fill in the blank

HERE IS THE DEPRECIATION TABLE

TABLE 8.5 Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* 27.5-Year Residential Real Property The applicable annual percentage is (use the column for the month in the first year the property is placed in service): 1 2 3 4 5 6 9 12 3.182 2.273 Recovery Year(s) 1 2-18 19-27 28 29 2.576 3.636 3.636 3.485 3.636 3.637 1.970 0.000 3.636 3.637 2.273 0.000 2.879 3.636 3.637 2.576 0.000 7 1.667 3.636 3.637 3.636 0.152 8 1.364 3.636 3.637 3.636 0.455 1.970 3.636 3.637 3.485 0.000 10 0.758 3.636 3.637 3.636 1.061 3.637 2.879 0.000 11 0.455 3.636 3.637 3.636 1.364 1.061 3.636 3.637 3.636 0.758 3.637 3.182 0.000 0.152 3.636 3.637 3.636 1.667 39-Year Nonresidential Real Property The applicable annual percentage is (use the column for the month in the first year the property is placed in service): 1 2 3 4 5 6 7 8 9 10 11 12 Recovery Year(s) 1 2-39 40 1.391 2.461 2.564 0.107 2.247 2.564 0.321 2.033 2.564 0.535 1.819 2.564 0.749 1.605 2.564 0.963 2.564 1.177 1.177 2.564 1.391 0.963 2.564 1.605 0.749 2.564 1.819 0.535 2.564 2.033 0.321 2.564 2.247 0.107 2.564 2.461 *The official tables contain a separate row for each year. For ease of presentation, certain years are grouped together in these two tables. In some instances, this will produce a difference of .001 percent when compared with the official tables