Question 3 (30 points): Smith Enterprises purchases a 16-unit apartment complex for $1,100,000 on June 7^th. An appraisal reveals the fair market value of the land to be $300,000 and the building to be $900,000.

1. Calculate the first year depreciation for the apartment complex.

2. Calculate the second year depreciation for the apartment complex.

3. If Smith Enterprises sells the apartment complex on August 4^th of the third year, calculate the third year depreciation.

(Note: I am unsure if I have to adjust for the fact that the market value is higher than the original purchase price)