On June 1^stof the current year,Kayla and Ralph purchased a rental beach house for $700,000.Of that amount,$400,000 was for the land value.How much depreciation deduction can they take in the current year? You may need to refer to the depreciation tables.)

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The depreciation deduction is calculated on the building value, not the land. The building value is $300,000 ($700,000 - $400,000). Using the MACRS 27.5-year residential rental property table, the first-year depreciation rate is approximately 3.636%. Therefore, $300,000 * 3.636% = $10,908. However, since the property was purchased in June, only half of the first year's depreciation is allowed, resulting in $5,454. This is closest to option A, $5,910, considering rounding or table differences.

On June 1st of the Current Year,Kayla and Ralph Purchased

On June 1^stof the Current Year,Kayla and Ralph Purchased