A building with business offices, a reception area, and numerous small diagnosis rooms is placed in service by a group of three orthopedic surgeons on January 4 for $650,000. a. What is the MACRS-GDS property class? b. Calculate the depreciation deduction for years 1, 4, and 7 if it is kept longer than 7 years. c. Calculate the depreciation deduction for years 1, 4, and 7 if it is sold on July 1 in the 7th calendar year. d. Why is it highly unlikely the building will ever be completely depreciated?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
A building with business offices, a reception area, and numerous small diagnosis rooms is placed in service by a group of three orthopedic surgeons on January 4 for $650,000. a. What is the MACRS-GDS property class? b. Calculate the depreciation deduction for years 1, 4, and 7 if it is kept longer than 7 years. c. Calculate the depreciation deduction for years 1, 4, and 7 if it is sold on July 1 in the 7th calendar year. d. Why is it highly unlikely the building will ever be completely
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