Real Estate Math

A real estate investor depreciates a residential rental property over 27.5 years. The building (not land) cost $220,000. What is the annual depreciation deduction?

A$6,000

B$8,000✓ Correct

C$8,727

D$10,000

Explanation

Annual depreciation = Building cost ÷ 27.5 years = $220,000 ÷ 27.

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