Final answer:
The cost recovery deduction for the year 2018 for Jack's new factory building, using the alternative depreciation system, would be $50,000.
Step-by-step explanation:
The subject question is in the realm of accounting and touches upon the concepts of cost recovery under the alternative depreciation system (ADS). To find the cost recovery deduction for Jack's new factory building for the year 2018, we would need to apply the prescribed ADS depreciation rates to the cost of the building.
When applying the ADS for a nonresidential real property, the property is depreciated over a 40-year straight-line method. Assuming that the factory is considered such a property, the annual depreciation would be the cost of the building divided by 40. However, since it was purchased in September, only 4 months of depreciation would apply for 2017, and the full year for 2018. The calculation would thus be $1,000,000 divided by 40, equaling $25,000, and it would double for a full year, making the deduction $50,000 for the year 2018.