Reference no: EM131789974

On December 2 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 $1,620,000; $385,000 was allocated to the basis of the land and the remaining $1,235,000 was allocated to the basis of the building.

a. Using MACRS, what is Javier's depreciation expense on the building for years 1 through 3?

b. What would be the year 3 depreciation expense if the building was sold on April 6 of year 3?

c. Answer the question in part (a), except assume the building was purchased and placed in service on October 28 instead of December 2.

d. Answer the question in part (a), except assume that the building is residential property.

e. What would be the depreciation for 2016, 2017, and 2018 if the property were nonresidential property purchased and placed in service December 2, 1999 (assume the same original basis)?