On October 7 of year 1, Javier purchased a building, including the land it was on, to
Question:
On October 7 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 $1,304,500; $242,000 was allocated to the basis of the land and the remaining $1,062,500 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 Javier’s depreciation expense on the building for years 1 through 3?
b. What would be the year 3 depreciation expense if the building was sold on May 12 of year 3?
c. Answer the question in part (a), except assume the building was purchased and placed in service on May 28 instead of October 7.
d. Answer the question in part (a), except assume that the building is a residential property
e. What would be the depreciation for 2015, 2016, and 2017 if the property were nonresidential property purchased and placed in service on October 7, 1998 (assume the same original basis)?
Expert Answer:
Working a Depreciation Expenses in Year 1 05351062500 Depreciation Expenses in Year 1 5684 Deprec... View the full answer
