Poplock LLC purchased a warehouse and land during the current year for $350,000.The purchase price was allocated as follows: $275,000 to the building and $75,000 to the land.The property was placed in service on August 12.Calculate Poplock's maximum depreciation for this first year.(Use MACRS Table 5 in the text)(Round final answer to the nearest whole number)

Question

Poplock LLC purchased a warehouse and land during the current year for $350,000.The purchase price was allocated as follows: $275,000 to the building and $75,000 to the land.The property was placed in service on August 12.Calculate Poplock's maximum depreciation for this first year.(Use MACRS Table 5 in the text)(Round final answer to the nearest whole number)

Quizplus · Accepted Answer

The correct answer is A.The property was placed in service on August 12, so Poplock is entitled to 5/12 of a full year's depreciation for the first year. The depreciation rate for a 39-year building is 3.636%. Therefore, Poplock's maximum depreciation for this first year is $275,000 * 3.636% * 5/12 = $2,648.

Poplock LLC Purchased a Warehouse and Land During the Current