On November 10 of year 1, Javier purchased a building, including the land it was...
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Accounting
On November 10 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 $2,000,000; $600,000 was allocated to the basis of the land and the remaining $1,400,000 was allocated to the basis of the building (10).
Part A What is the first year depreciation if the building was placed in service in January of that year (10)?
Part B What is the depreciation deduction in the year the building is sold (5)?
TABLE 5 Nonresidential Real Property Mid-Month Convention Straight Line39 Years (for assets placed in service on or after May 13, 1998)
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
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