Della purchased a warehouse on February 25, 2015, for $350,000. $45,000 of the price was for the land. What is her cost recovery deduction for 2015 rounded to the nearest dollar?

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The cost recovery deduction for a warehouse (nonresidential real property) is calculated using the straight-line method over 39 years. The depreciable basis is $305,000 ($350,000 - $45,000 for land). For 2015, Della can claim 10.5 months of depreciation (from February 25 to December 31). The annual depreciation is $305,000 / 39 = $7,820.51. For 10.5 months, it is $7,820.51 * 10.5/12 = $6,853.

Della Purchased a Warehouse on February 25, 2015, for $350,000