Problem
Sally purchases a building on August 1, 2018. The initial cost basis of the building is $200,000.
1. May Sally deduct bonus depreciation for the warehouse?
2. May Sally deduct a 179 deduction for the warehouse?
3. Suppose Sally decides not to take any special depreciation allowances (i.e. bonus or 179 deductions).
4. What is the method of depreciation used if the building is considered residential real property? What would the applicable recovery period?
5. What is the method of depreciation used if the building is considered nonresidential real property? What would the applicable recovery period?
6. On what date is Sally presumed to have purchased the building for tax purposes