Exercise 8-21 (LO. 2) Lopez acquired a building on June 1, 2015, for $1,000,000. Compute the depreciation deduction assuming the building is classified as (a) residential and (b) non residential. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as residential rental real estate. b. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as nonresidential real estate.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Exercise 8-21 (LO. 2)
Lopez acquired a building on June 1, 2015, for $1,000,000. Compute the depreciation deduction assuming the building is classified as (a)
residential and (b) non residential.
Click here to access the depreciation table to use for this problem.
If required, round your answers to the nearest dollar.
a. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as residential rental real estate.
b. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as nonresidential real estate.
ets
al.a
Check My Work
216 PM
59 F Partly suney
CA
4 de
Transcribed Image Text:eBook Exercise 8-21 (LO. 2) Lopez acquired a building on June 1, 2015, for $1,000,000. Compute the depreciation deduction assuming the building is classified as (a) residential and (b) non residential. Click here to access the depreciation table to use for this problem. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as residential rental real estate. b. Calculate Lopez's cost recovery deduction for 2020 if the building is classified as nonresidential real estate. ets al.a Check My Work 216 PM 59 F Partly suney CA 4 de
mibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming
Mid-Month Convention* (Percentage Rates)
For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property
Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service):
Year(s)
1
4
5
6
8
9
10
11
12
3.485
3.182
2.879
2.576
2.273
1.970
1.667
1.364
1.061
0.758
0.455
0.152
2-18
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
19-27
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
28
1.970
2.273
2.576
2.879
3.182
3.485
3.636
3.636
3.636
3.636
3.636
3.636
29
0.000
0.000
0.000
0.000
0.000
0.000
0.152
0.455
0.758
1.061
1.364
1.667
For Property Placed in Service after December 31, 1986, and before May 13, 1993:31.5-Year Nonresidential Real Property
The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service):
Recovery
Year(s)
3
4
5
6
7
10
11
12
3.042
2.778
2.513
2.249
1.984
1.720
1.455
1.190
0.926
0.661
0.397
0.132
2-19
3.175
3.175
3.175
3.175
3.175
3.175
3.175
3,175
3.175
3.175
3.175
3.175
20-31
3.174
3.174
3.174
3.174
3.174
3.174
3.174
3.174
3.174
3.174
3.174
3.174
32
1.720
1.984
2.249
2.513
2.778
3.042
3.175
3.175
3.175
3.175
3.175
3.175
33
0.000
0.000
0.000
0.000
0.000
0.000
0.132
0.397
0.661
0.926
1.190
1,455
For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property
The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service):
Recovery
Year(s)
1
2.
4
6.
8
10
11
12
1.
2.461
2.247
2.033
1.819
1.605
1.391
1.177
0.963
0.749
0.535
0.321
0.107
2-39
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
40
0.107
0.321
0.535
0.749
0.963
1.177
1.391
1.605
1.819
2.033
2.247
2.461
*The official tables contain a separate row for each year. For ease of presentation, certain years are
3:19 PM
59°F Partly sunny
2/20/2022
bp
Transcribed Image Text:mibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* (Percentage Rates) For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Year(s) 1 4 5 6 8 9 10 11 12 3.485 3.182 2.879 2.576 2.273 1.970 1.667 1.364 1.061 0.758 0.455 0.152 2-18 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 19-27 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 3.637 28 1.970 2.273 2.576 2.879 3.182 3.485 3.636 3.636 3.636 3.636 3.636 3.636 29 0.000 0.000 0.000 0.000 0.000 0.000 0.152 0.455 0.758 1.061 1.364 1.667 For Property Placed in Service after December 31, 1986, and before May 13, 1993:31.5-Year Nonresidential Real Property The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Recovery Year(s) 3 4 5 6 7 10 11 12 3.042 2.778 2.513 2.249 1.984 1.720 1.455 1.190 0.926 0.661 0.397 0.132 2-19 3.175 3.175 3.175 3.175 3.175 3.175 3.175 3,175 3.175 3.175 3.175 3.175 20-31 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 3.174 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.175 3.175 3.175 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.000 0.132 0.397 0.661 0.926 1.190 1,455 For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Recovery Year(s) 1 2. 4 6. 8 10 11 12 1. 2.461 2.247 2.033 1.819 1.605 1.391 1.177 0.963 0.749 0.535 0.321 0.107 2-39 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 2.564 40 0.107 0.321 0.535 0.749 0.963 1.177 1.391 1.605 1.819 2.033 2.247 2.461 *The official tables contain a separate row for each year. For ease of presentation, certain years are 3:19 PM 59°F Partly sunny 2/20/2022 bp
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