Della purchased a warehouse on February 25, 2011, for $350,000. $45,000 of the price was for the land. What is her cost recovery deduction for 2011 rounded to the nearest dollar?

A. $6,853
B. $7,865
C. $9,705
D. $11,137
is it D

A. $6,853

To calculate Della's cost recovery deduction for 2011, we need to first determine the cost of the building. We can do this by subtracting the cost of the land ($45,000) from the total cost of the warehouse ($350,000).

Cost of the building = Total cost of the warehouse - Cost of the land
= $350,000 - $45,000
= $305,000

Now that we know the cost of the building, we can calculate the cost recovery deduction using the Modified Accelerated Cost Recovery System (MACRS) method. The MACRS provides a depreciation schedule for various types of assets, including commercial buildings.

For commercial buildings, the MACRS system allows for a straight-line depreciation deduction over 39 years. This means that the building's cost is divided by 39, and that amount is deducted each year.

Cost recovery deduction for 2011 = Cost of the building / Number of years of depreciation
= $305,000 / 39
≈ $7,820.51

Rounded to the nearest dollar, the cost recovery deduction for 2011 is $7,821.

Therefore, the correct answer is not D ($11,137), but rather B ($7,865).