On January 2, 2020, you purchased for $950,000*** and placed in service a small 1950s-vintage office building. It’s definitely showing its age but a report from your structural engineer states that it should last another 15 years before reaching the end of its useful life and having to be demolished. *** You actually paid a total of $1.2M to the seller but properly allocated $250,000 to Mother Earth. What is your 2020 MACRS depreciation deduction with respect to this building (not § 179 or “bonus depreciation”)? Explain.
On January 2, 2020, you purchased for $950,000*** and placed in service a small 1950s-vintage office building. It’s definitely showing its age but a report from your structural engineer states that it should last another 15 years before reaching the end of its useful life and having to be demolished. *** You actually paid a total of $1.2M to the seller but properly allocated $250,000 to Mother Earth. What is your 2020 MACRS depreciation deduction with respect to this building (not § 179 or “bonus depreciation”)? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 2, 2020, you purchased for $950,000*** and placed in service a small 1950s-vintage office building. It’s definitely showing its age but a report from your structural engineer states that it should last another 15 years before reaching the end of its useful life and having to be demolished.
*** You actually paid a total of $1.2M to the seller but properly allocated $250,000 to Mother Earth.
What is your 2020 MACRS
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