Rafael bought an apartment building on March 27,2010,at a cost of $2,000,000 (exclusive of the cost allocated to the land).He sells the building on November 3,2017.What is Rafael's cost recovery deduction on the building for 2017 if he wants to take the maximum deduction allowable on the building?

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The building is a residential rental property, which has a 27.5-year recovery period under the Modified Accelerated Cost Recovery System (MACRS). For 2017, Rafael can take 10.5 months of depreciation (January through October plus half of November), which results in a cost recovery deduction of $63,630.

Rafael Bought an Apartment Building on March 27,2010,at a Cost