On August 2, 2018, Wendy purchased a new office building for $3,800,000. On October 1, 2018, she began to rent out office space in the building. On July 15, 2022, Wendy sold the office building. If required, round your answers to the nearest dollar. a. What MACRS convention applies to the new office building?
b. What is the life of the asset for MACRS?
c. Wendy's cost recovery deduction for 2018 is $ and for 2022 is $ .

a. Mild Month MACRS convention applies to the new office building

b. The life of the asset under MACRS is 39 years

c. The cost recovery deduction for 2018 is $20,330

The cost recovery deduction for 2022 is $52,776

Explanation:

a. According to the given data Mild Month MACRS convention is applicable here because real property is placed in service in the middle of the month in which acquired.

b. The life of the asset under MACRS is 39 years

c. cost recovery deduction for 2018= $3,800,000*0.535%

cost recovery deduction for 2018=$20,330

cost recovery deduction for 2022= $3,800,000*2.564%

cost recovery deduction for 2022= $52,776

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.