Jodi has a duplex with operating income of $6,000 before depreciation.If the duplex cost $150,000 including $40,000 land value,how much is Jodi's taxable income after depreciation?

Question

Quizplus · Accepted Answer

The building cost is $110,000 ($150,000 - $40,000 land value). Depreciation is calculated over 27.5 years for residential property, so annual depreciation is $4,000 ($110,000 / 27.5). Taxable income is $6,000 - $4,000 = $2,000.

Jodi Has a Duplex with Operating Income of $6,000 Before