Lucky Strike Mine (LLC) purchased a silver deposit for $1,500,000. It estimated it would extract 500,000 ounces of silver from the deposit. Lucky Strike mined the silver and sold it, reporting gross receipts of $1.8 million, $2.5 million, and $2 million for Years 1 through 3, respectively. During Years 1 through 3, Lucky Strike reported net income (loss) from the silver deposit activity in the amount of ($100,000), $400,000, and $100,000, respectively. In Years 1 through 3, Lucky Strike actually extracted 300,000 ounces of silver as follows:

What is Lucky Strike's depletion deduction for Year 2 if the applicable percentage depletion for silver is 15 percent?
A) $200,000
B) $375,000
C) $400,000
D) $450,000
E) None of the choices are correct.
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
98) Janey purchased machinery on April 8 ^th of the current year. The relevant costs for the year are as follows: machinery for $10,000, $800 shipping, $50 for delivery insurance, $500 for installation, $750 for sales tax, $150 for the annual tune-up, and $200 of property taxes (an annual tax on business property). What is Janey's tax basis for the machinery?

Crouch LLC Placed in Service on May 19, 2020, Machinery

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