On June 1^stof 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.)

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The correct answer is A.The depreciation deduction for the current year is $7,880. This is calculated by taking the cost of the building ($1,200,000 - $800,000 = $400,000) and multiplying it by the depreciation rate for residential rental property (3.636%).

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

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