Bhaskar purchased a new factory building and land on September 10, 2019, for $3,700,000.($500,000 of the purchase price was allocated to the land.) He elected the alternative depreciation system (ADS).Determine the cost recovery deduction for 2020.
A)$23,328
B)$80,000
C)$82,048
D)$92,500

Question

Quizplus · Accepted Answer

Under the alternative depreciation system (ADS), nonresidential real property is depreciated over 40 years using the straight-line method. The building cost is $3,200,000 ($3,700,000 - $500,000 for land). For 2020, the cost recovery deduction is $80,000 ($3,200,000 / 40 years).

Bhaskar Purchased a New Factory Building and Land on September