Rickie purchased a house for $300,000.$250,000 of the $300,000 is for the building and $50,000 is for the land.He rents it out on April 1,2011 to the Wilson family.How much depreciation can he take for 2011?

Question

Quizplus · Accepted Answer

The depreciable basis of the building is $250,000. Assuming a useful life of 27.5 years and a salvage value of $0, the annual straight-line depreciation would be $9,090 ($250,000/27.5). 
Since the property was rented out on April 1, 2011, Rickie can only take depreciation for 9 months (April-December). 
Thus, the depreciation for 2011 would be: $9,090/12 months x 9 months = $6,440. 
Therefore, the best choice is C.

Rickie Purchased a House for $300,000