Ted is in the rental real estate business. During 2013, Ted purchased and placed in service the following assets:
• Apartment building costing $300,000 (exclusive of $80,000 land): Placed in service on May 12 with a 27.5-year MACRS recovery period.
• Office furniture costing $350,000: Placed in service on April 10 with a 7-year MACRS recovery period.
• Office equipment costing $200,000: Placed in service on November 1 with a 5-year MACRS recovery period.
a. What are Ted's total depreciation deductions in 2013 assuming he does not elect Sec. 179 expensing and he elects out of bonus depreciation?
b. What are Ted's total depreciation deductions in 2013 assuming he elects Sec. 179 expensing in 2013 for $350,000 on the furniture and $150,000 on the equipment? Assume Ted elects out of bonus depreciation on all qualifying properties.
c. What are Ted's total depreciation deductions in 2013 assuming he elects Sec. 179 expensing in 2013 for $200,000 on the furniture and $300,000 on the equipment? Assume Ted elects out of bonus depreciation on all qualifying properties.