Ying pays $170,000 for an office building on August 27, 2017, to use in his consulting business. He properly allocates $150,000 to the building and $20,000 to the land. What is Ying's 2018 depreciation deduction on the property?
A)$1,124
B)$1,443
C)$1,923
D)$3,846
E)$5,454

Question

Quizplus · Accepted Answer

The correct depreciation deduction for Ying's office building in 2018 is $3,846. This is calculated using the Modified Accelerated Cost Recovery System (MACRS) for a commercial property, which has a recovery period of 39 years. The calculation is $150,000 (cost of the building) / 39 years = $3,846.15 per year. Land is not depreciable.

Ying Pays $170,000 for an Office Building on August 27