On June 1 of the current year, Jack and Angie purchased a rental beach house for $900,000 and rented it right away. Of that amount, $600,000 was for the land value. How much depreciation deduction can Jack and Angie take in the current year? (You may need to refer to the depreciation tables.)
A) $5,910
B) $10,909
C) $11,820
D)$17,730

Question

Quizplus · Accepted Answer

The depreciation is calculated on the building value only, which is $300,000 ($900,000 - $600,000). Using the mid-month convention for residential rental property with a 27.5-year recovery period, the first-year depreciation is approximately $5,910.

On June 1 of the Current Year, Jack and Angie