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[The following information applies to the questions displayed below.]

On January 8 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 $1,399,500; $322,000 was allocated to the basis of the land and the remaining $1,077,500 was allocated to the basis of the building. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)

c. Answer the question in part (a), except assume the building was purchased and placed in service on October 28 instead of January 8.

Explanation / Answer

Ans C Calculation of depreciation Recovery period is 39 years Year Placed in service Basis B Dep rate D Dep exp B*D 1 28-Oct $1,077,500 0.535% $5,764.63 2 $1,077,500 2.564% $27,627.10 3 $1,077,500 2.564% $27,627.10 If any doubt please comment

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