Simmons LLC purchased an office building and land several years ago for $250,000. The purchase price was allocated as follows: $200,000 to the building and $50,000 to the land. The property was placed in service on October 2. If the property is disposed of on February 27 during the 10^th year, calculate Simmons' maximum depreciation in the 10^th year. (Use MACRS Table 5) EXHIBIT 10-6 A) $641. B) $909. C) $5,128. D) $7,346. E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The mid-month convention applies. Non-residential property has a 39-year recovery period. The depreciation is $641 ($200,000 × 2.564% × 1.5/12).

Simmons LLC Purchased an Office Building and Land Several Years