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. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)

Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.

Problem 10-51 Part b (Algo)

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

table 1:

Table 1 MACRS Half-Year Convention

Depreciation Rate for Recovery Period
	3-Year	5-Year	7-Year	10-Year	15-Year	20-Year
Year 1	33.33%	20.00%	14.29%	10.00%	5.00%	3.750%
Year 2	44.45	32.00	24.49	18.00	9.50	7.219
Year 3	14.81	19.20	17.49	14.40	8.55	6.677
Year 4	7.41	11.52	12.49	11.52	7.70	6.177
Year 5		11.52	8.93	9.22	6.93	5.713
Year 6		5.76	8.92	7.37	6.23	5.285
Year 7			8.93	6.55	5.90	4.888
Year 8			4.46	6.55	5.90	4.522
Year 9				6.56	5.91	4.462
Year 10				6.55	5.90	4.461
Year 11				3.28	5.91	4.462
Year 12					5.90	4.461
Year 13					5.91	4.462
Year 14					5.90	4.461
Year 15					5.91	4.462
Year 16					2.95	4.461
Year 17						4.462
Year 18						4.461
Year 19						4.462
Year 20						4.461
Year 21						2.231

table 2:

TABLE 2a MACRS Mid-Quarter Convention: For property placed in service during the first quarter

Depreciation Rate for Recovery Period
	5-Year	7-Year
Year 1	35.00%	25.00%
Year 2	26.00	21.43
Year 3	15.60	15.31
Year 4	11.01	10.93
Year 5	11.01	8.75
Year 6	1.38	8.74
Year 7		8.75
Year 8		1.09

TABLE 2b MACRS Mid-Quarter Convention: For property placed in service during the second quarter

Depreciation Rate for Recovery Period
	5-Year	7-Year
Year 1	25.00%	17.85%
Year 2	30.00	23.47
Year 3	18.00	16.76
Year 4	11.37	11.97
Year 5	11.37	8.87
Year 6	4.26	8.87
Year 7		8.87
Year 8		3.34

TABLE 2c MACRS Mid-Quarter Convention: For property placed in service during the third quarter

Depreciation Rate for Recovery Period
	5-Year	7-Year
Year 1	15.00%	10.71%
Year 2	34.00	25.51
Year 3	20.40	18.22
Year 4	12.24	13.02
Year 5	11.30	9.30
Year 6	7.06	8.85
Year 7		8.86
Year 8		5.53

TABLE 2d MACRS-Mid Quarter Convention: For property placed in service during the fourth quarter

Depreciation Rate for Recovery Period
	5-Year	7-Year
Year 1	5.00%	3.57%
Year 2	38.00	27.55
Year 3	22.80	19.68
Year 4	13.68	14.06
Year 5	10.94	10.04
Year 6	9.58	8.73
Year 7
Year 8

table 3:

TABLE 3 Residential Rental Property Mid-Month Convention Straight Line27.5 Years

Month Property Placed in Service
	Month 1	Month 2	Month 3	Month 4	Month 5	Month 6	Month 7	Month 8	Month 9	Month 10	Month 11	Month 12
Year 1	3.485%	3.182%	2.879%	2.576%	2.273%	1.970%	1.667%	1.364%	1.061%	0.758%	0.455%	0.152%
Year 2-9	3.636	3.636	3.636	3.636	3.636	3.636	3.636	3.636	3.636	3.636	3.636	3.636
Year 10	3.637	3.637	3.637	3.637	3.637	3.637	3.636	3.636	3.636	3.636	3.636	3.636
Year 11	3.636	3.636	3.636	3.636	3.636	3.636	3.637	3.637	3.637	3.637	3.637	3.637

table 4:

TABLE 4 Nonresidential Real Property Mid-Month Convention Straight Line31.5 Years (for assets placed in service before May 13, 1993)

Month Property Placed in Service
	Month 1	Month 2	Month 3	Month 4	Month 5	Month 6	Month 7	Month 8	Month 9	Month 10	Month 11	Month 12
Year 1	3.042%	2.778%	2.513%	2.249%	1.984%	1.720%	1.455%	1.190%	0.926%	0.661%	0.397%	0.132%
Year 2-7	3.175	3.175	3.175	3.175	3.175	3.175	3.175	3.175	3.175	3.175	3.175	3.175
Year 8	3.175	3.174	3.175	3.174	3.175	3.174	3.175	3.175	3.175	3.175	3.175	3.175

table 5:

TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line39 Years (for assets placed in service on or after May 13, 1993)

Month Property Placed in Service
	Month 1	Month 2	Month 3	Month 4	Month 5	Month 6	Month 7	Month 8	Month 9	Month 10	Month 11	Month 12
Year 1	2.461%	2.247%	2.033%	1.819%	1.605%	1.391%	1.177%	0.963%	0.749%	0.535%	0.321%	0.107%
Year 239	2.564	2.564	2.564	2.564	2.564	2.564	2.564	2.564	2.564	2.564	2.564	2.564
Year 40	0.107	0.321	0.535	0.749	0.963	1.177	1.391	1.605	1.819	2.033	2.247	2.461