Problem $8-35($LO$.2)$

On April $3,2024,$ Terry purchased and placed in service a building that cost $$2,000,000.$ An appraisal determined that $25\%$ of the total cost was attributed to the value of the land. The bottom floor of the building is leased to a retail business for $$32,000.$ The other floors of the building are rental apartments with an annual rent of $$160,000.$

If required, round your answer to the nearest dollar.

Click here to access the$$depreciation table$$to use for this problem.

a$.$How is the property classified for MACRS?

Residential rental real estateNonresidential real estateResidential rental real estate

b$.$What is the life of the asset for MACRS?

$15$ years$27\mathrm{.}5$ years$31\mathrm{.}5$ years$39$ years$27\mathrm{.}5$ years

c$.$Determine Terry's cost recovery deduction for $2024.$