Doug purchased a new factory building on January 15, 1990, for $400,000. On March 1, 2017, the building was sold. Determine the cost recovery deduction for the year of the sale; Doug did not use the MACRS straight-line method.
A)$0
B)$1,587
C)$2,645
D)$12,696
E)None of the above

Question

Quizplus · Accepted Answer

Since Doug did not use the MACRS straight-line method, he likely used the MACRS 39-year straight-line method for nonresidential real property. The building was held for 27 years and 1.5 months. The cost recovery deduction for the year of sale is calculated using the mid-month convention, which results in a partial year deduction.

Doug Purchased a New Factory Building on January 15, 1990