Della purchased a warehouse on February 25,2017,for $350,000.$45,000 of the price was for the land.What is her cost recovery deduction for 2017 rounded to the nearest dollar?

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The cost recovery deduction for 2017 for Della's warehouse can be calculated using the Modified Accelerated Cost Recovery System (MACRS). Since the warehouse is considered non-residential real property, it is depreciated over a 39-year straight-line method. The cost basis for depreciation is the purchase price minus the land value ($350,000 - $45,000 = $305,000). For property placed in service in any month other than January, the deduction for the first year is prorated. Since the warehouse was purchased in February, Della can claim 10.5 months of depreciation for 2017. The annual depreciation is $305,000 / 39 = $7,820.51. For 10.5 months, the depreciation deduction is $7,820.51 * (10.5 / 12) = $6,852.94, rounded to the nearest dollar is $6,853.

Della Purchased a Warehouse on February 25,2017,for $350,000