$On$ September $15,2022,$ Stone Inc. purchased and placed into service $an$ office building. The purchase price was $$5,650,000($$$4,725,000$ building and $$925,000$ land$).$ Stone Inc. was incorporated $on$ March $5,2021,$ and $isan$ accrual basis corporation that will use a calendar year$-$end $(\frac{12}{31}).$

$a.$ What $is$ Stone Inc.$s2022$ and $2023$ depreciation expense for this building?

$b.$ What $is$ the formula for calculating the depreciation factor for $2022?$

Use the informatio$\frac{n}{a}$nswers from question $1.$

$On$ September $12,2024$ Stone Inc. sold the office building for $$7,400,000(the$ sales price was allocated $$6,200,000to$ the building and $$1,200,000to$ the land$).$

$10$ points

$a.$ How much depreciation should Stone Inc. claim $on$ its $2024$ tax return?

$b.$ What $is$ the formula for calculating the depreciation factor for $2024?$

$c.$ What $is$ the precise Internal Revenue Code citation for the cost recovery convention that $is$ being applied?

$d.$ Compute the gai$\frac{n}{l}$oss realized and recognized for $2024,$ including the character $of$ the gain