Wellington Apartments purchases an apartment building on November 9,2016,for $1,000,000 (exclusive of the cost allocated to the land).What is the 2016 MACRS depreciation deduction?

Question

Quizplus · Accepted Answer

According to MACRS, the depreciation period for residential real estate is 27.5 years. Since the purchase was made on November 9, 2016, only 1.5 months of depreciation can be taken in 2016. Using the straight-line method, the depreciation deduction for 2016 would be: 
$1,000,000/27.5 x 1.5/12 = $4,550. Therefore, the correct answer is B.

Wellington Apartments Purchases an Apartment Building on November 9,2016,for $1,000,000