Asked by Lizbeth RamosPerdomo on Jun 29, 2024
Verified
On June 1 of the current year,Jack and Angie purchased a rental beach house for $900,000 and rented it right away.Of that amount,$600,000 was for the land value.How much depreciation deduction can Jack and Angie take in the current year? (You may need to refer to the depreciation tables. )
A) $11,820
B) $10,909
C) $5,910
D) $17,730
Depreciation Deduction
A tax deduction that allows a taxpayer to recover the cost of property or assets that have a useful life beyond the tax year, by spreading the cost over the life of the property.
Depreciation Tables
Charts provided by the IRS to assist taxpayers in calculating the depreciation expense of an asset for tax purposes over its useful life.
- Comprehend the regulations governing depreciation for rental properties.
Verified Answer
Depreciation deduction = [(900,000-600,000) x 40%] x 1.5% = $5,910.
Hence, the correct answer is C.
Learning Objectives
- Comprehend the regulations governing depreciation for rental properties.
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