On May 30, 2018, Jane purchased a factory building to use for her business.In August 2019, Jane paid $300,000 for improvements to the building.Determine Jane's total deduction with respect to the building improvements for 2019.
A)$2,889
B)$4,173
C)$4,815
D)$25,000

Question

Quizplus · Accepted Answer

The total deduction for the building improvements for 2019 would be calculated based on the IRS guidelines for depreciation. Since the improvements are considered as part of the building, they would be depreciated over the property's useful life, which for commercial real estate is typically 39 years. The annual depreciation expense would be $300,000 / 39 = $7,692.31. However, since the improvements were made partway through the year, in August, only 5 months of depreciation can be taken for 2019. Thus, the deduction for 2019 would be (5/12) * $7,692.31 = $3,205.96, which is not an option provided. Given the options, none directly match the calculated deduction based on standard depreciation methods. It's possible there may be a misunderstanding or a need for additional context, such as specific tax laws or incentives that were in effect for the 2019 tax year, which could affect the deduction amount. Without additional specific tax provisions or incentives being applied, the standard calculation does not match the provided choices.

On May 30, 2018, Jane Purchased a Factory Building to Use