1. Red Company purchased an apartment building on November 1, 2015, for $7,000,000. Determine the cost recovery deduction for 2015.
2. Pink Corporation purchased a business asset (seven-year property) on October 18, 2015, at a cost of $30,000. This is the only asset it purchased during the year. Pink did not elect to expense any of the asset under § 179, nor did it elect to take additional or bonus depreciation or use straight-line cost recovery. Determine the cost recovery deduction for 2015.
3. Purple Company acquires a new machine (seven-year property) on December 9, 2015, at a cost of $204,000. Purple makes the election to expense the maximum amount under § 179. No election is made to use the straight-line method. Determine the total deductions in calculating taxable income related to the machine for 2015 assuming Purple has taxable income of $400,000.
4. On June 4, 2014, Sam purchased an automobile (5 year property) that cost $30,000. The car is used 70% for business and 30% for personal use. Determine the cost recovery for 2014 and 2015 assuming the business use remains the same. 5. On May 12, 2014, Kate purchased an automobile (5 year property) that cost $40,000.She used the automobile 40% for business and 60% for personal use during 2014. Determine the cost recovery for 2014 and 2015 assuming the business use percentage remains the same.