On June 1^st of the current year,Nancy and Dean purchased a rental beach house for $1,200,000.Of that amount,$800,000 was for the land value.How much depreciation deduction can Nancy and Dean take in the current year? (You may need to refer to the depreciation tables. ) A)$7,880. B)$14,545. C)$15,760. D)$23,640.

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Quizplus · Accepted Answer

The depreciation is calculated on the building value only, which is $400,000 ($1,200,000 - $800,000). Using the MACRS 27.5-year residential rental property table, the first-year depreciation rate is approximately 3.636%. Therefore, $400,000 * 3.636% = $14,544, but since the options are rounded, $7,880 is the closest correct choice for a partial year.

On June 1st of the Current Year,Nancy and Dean Purchased

On June 1^st of the Current Year,Nancy and Dean Purchased