A property is depreciated using straight-line depreciation. The building (not land) cost $180,000 and has a 27.5-year useful life for tax purposes. What is the annual depreciation deduction?
Why $6,545 Is Correct
Answer C: $6,545
Exam Tip: Real Estate Math
Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.
Key Real Estate Math Terms in This Question
People Also Study
Related Arizona Questions
- An Arizona appraiser using the cost approach estimates the value of a home as follows: land value = $80,000; replacement cost new of improvements = $220,000; accumulated depreciation = $30,000. What is the estimated value?Property Valuation
- A building cost $600,000 to build and has a useful economic life of 40 years. Using straight-line depreciation, what is the annual depreciation amount?Real Estate Math
- An Arizona appraiser calculates that a subject property has $75,000 of accrued depreciation on improvements with a reproduction cost of $300,000. The land value is $80,000. What is the indicated value by the cost approach?Property Valuation
- Using the cost approach, a property has land valued at $80,000 and improvements that cost $320,000 to build but have depreciated 25%. What is the estimated value?Real Estate Math
- An Arizona property has an annual property tax bill of $3,600. The tax is paid in two installments. The seller is closing on October 1. Using a 365-day proration, how many days of taxes has the seller already 'used' (January 1 through September 30)?Real Estate Math
- An appraiser values an Arizona commercial property using a cap rate of 7% and an NOI of $63,000. What is the indicated value?Property Valuation
- A buyer in Arizona closes on March 15. The annual property taxes are $4,380 and are paid in arrears. Using a 365-day year, how much does the seller owe the buyer in a tax proration (January 1 through March 14)?Real Estate Math
- Economic life of a building in the cost approach refers to:Property Valuation
Key Terms to Know
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
Study This Topic
Practice More Arizona Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →