A Colorado property purchased for $280,000 is 7 years old and was depreciated at $6,000/year for tax purposes. What is the adjusted cost basis?
Why $238,000 Is Correct
Answer B: $238,000
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 Colorado Questions
- A Colorado property is depreciated over 27.5 years for income tax purposes. If the depreciable basis is $275,000, what is the annual depreciation deduction?Real Estate Math
- A Colorado buyer takes a $400,000 loan at 6% for 30 years. Approximately how much total interest is paid in Year 1?Real Estate Math
- A Colorado property has a land value of $90,000 and improvement value of $310,000. The improvements are 15 years old with a 40-year economic life and no residual value. What is the depreciated value of the improvements using straight-line depreciation?Real Estate Math
- An appraiser uses the cost approach to value a Colorado commercial property. The replacement cost new is $800,000 and the property has 25% depreciation. The land is worth $150,000. What is the indicated value?Property Valuation
- A Colorado warehouse leases for $12.50 per square foot per year on a net lease basis. The warehouse is 8,000 square feet. What is the monthly rent?Real Estate Math
- A Colorado appraiser calculates the value using the cost approach as follows: land value $80,000; replacement cost new $350,000; accrued depreciation 20%. What is the indicated value?Property Valuation
- A Colorado borrower obtains a 30-year fixed-rate mortgage for $300,000 at 7% interest. The monthly principal and interest payment is approximately $1,996. What is the total interest paid over 30 years?Finance
- In the cost approach, 'accrued depreciation' is the total loss in value from: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 Colorado Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →