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On May 15 of year 1 Javier purchased a building including theland it was on to assemble his new equipment The total cost ofthe purchase was $1344000 $364000 was allocated to the basis

On May 15 of year 1 Javier purchased a building including theland it was on to assemble his new equipment The total cost ofthe purchase was $1344000 $364000 was allocated to the basis

On May 15 of year 1 Javier purchased a building, including theland it was on, to assemble his new equipment. The total cost ofthe purchase was $1,344,000; $364,000 was allocated to the basis ofthe land and the remaining $980,000 was allocated to the basis ofthe building. (Use MACRS Table 1, Table 2, Table 3, Table 4 andTable 5.) (Do not round intermediate calculations. Roundyour answer to the nearest dollar amount.)

a.

Using MACRS, what is Javier?s depreciation expense on thebuilding for years 1 through 3?

 

b.

What would be the year 3 depreciation expense if the buildingwas sold on October 13 of year 3?

 

c.

Answer the question in part (a), except assume the building waspurchased and placed in service on March 4 instead of May 15.

 

 

d.

Answer the question in part (a), except assume that the buildingis residential property.

 

 

e.

What would be the depreciation for 2014, 2015, and 2016 if theproperty were nonresidential property purchased and placed inservice May 15, 1997 (assume the same original basis)?

 

 

 

 
mahesh 24-Mar-2020

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