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, rounded to the nearest whole number:

Question

Quizplus · Accepted Answer

The building is depreciated over 39 years using the straight-line method for non-residential real property. The first-year depreciation is calculated as $275,000 / 39 years = $7,051.28 annually. Since the property was placed in service in August, only 4.5 months of depreciation is allowed for the first year: $7,051.28 * (4.5/12) = $2,648.

Poplock LLC Purchased a Warehouse and Land During the Current