Question

1. On 6/14/2013, Jack paid $130000 for a property. This purchase price represents $105000 for the cost of the building and $25000 for the cost of the land. On 8/2/2018, he sold the property for $130000. Compute the MACRS depreciation for each one of the years he owned the property.

Note: recovery period is 39 years.

Note: Find the depreciation for each year from 2013 to 2018, separately.

Answer 1

Year	Depreciation %	Depreciation
2013	1.391	$                         1,460.55
		[105000*1.391%]
2014	2.564	$                         2,692.20
		[105000*2.564%
2015	2.564	$                         2,692.20
		[105000*2.564%]
2016	2.564	$                         2,692.20
		[105000*2.564%]
2017	2.564	$                         2,692.20
		[105000*2.564%]
2018	0.321	$                             337.05
		[105000*0.321%]
The depreciation rates are taken from the MACRS
prescribed %s for the years. Such properties are
depreciated over 39 years. The starting year % depends
on the month in which the property is first put to use.
Likewise, the sale has occurred in February and hence
the % is only 0.391.
Please go through the MACRS theory to understand
the question better.