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16 September, 03:21

Calculator Ying pays $170,000 for an office building on August 27, 2018, to use in his consulting business. He properly allocates $150,000 to the building and $20,000 to the land. What is Ying's 2019 depreciation deduction on the property? a.$1,443 b.$3,846 c.$1,923 d.$5,454 e.$1,124

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  1. 16 September, 03:35
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    b.$3,846

    Explanation:

    As defined by IRS, the residential rental buildings is depreciated in 27.5 years and retail and other commercial building is depreciated in 39 years; while land is not allowed for depreciation.

    In this scenario, Ying allocate $150,000 to the building for his consulting business; thus this is a commercial building.

    Ying's 2019 depreciation deduction on the property in 2019 = $150,000 / 39 years = $3,846
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