Tom Tom LLC purchased a rental house and land during the current year for $150,000.The purchase price was allocated as follows: $100,000 to the building and $50,000 to the land.The property was placed in service on May 22.Calculate Tom Tom's maximum depreciation for this first year.(Use MACRS Table 3 in the text)

Question

Tom Tom LLC purchased a rental house and land during the current year for $150,000.The purchase price was allocated as follows: $100,000 to the building and $50,000 to the land.The property was placed in service on May 22.Calculate Tom Tom's maximum depreciation for this first year.(Use MACRS Table 3 in the text)

Quizplus · Accepted Answer

The building is depreciated over 27.5 years using the MACRS residential rental property table. For the first year, the depreciation rate is 2.273% of the building's cost ($100,000), resulting in $2,273.

Tom Tom LLC Purchased a Rental House and Land During