Wolfgang, a calendar-year taxpayer, purchased residential rental realty in April of year 1 for $150,000 ($50,000 of which was for the land).
a. What is Wolfgang's MACRS depreciation deduction in years 1 and 2?
b. What is his depreciation deduction in year 20 if he disposes of the asset in August of that year?
c. How would your answers change to (a) and (b) if the property is nonresidential realty?

Question

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The Answer of Wolfgang, a calendar-year taxpayer, purchased residential rental realty in April of year 1 for $150,000 ($50,000 of which was for the land).
a. What is Wolfgang's MACRS depreciation deduction in years 1 and 2?
b. What is his depreciation deduction in year 20 if he disposes of the asset in August of that year?
c. How would your answers change to (a) and (b) if the property is nonresidential realty?

Wolfgang, a Calendar-Year Taxpayer, Purchased Residential Rental Realty in April