Real Estate Math
An Illinois commercial building costs $1,200,000. The land is valued at $240,000. Using 40-year straight-line depreciation, what is the annual building depreciation?
A$30,000
B$24,000✓ Correct
C$6,000
D$36,000
Explanation
Building value = Total cost - Land value = $1,200,000 - $240,000 = $960,000. Annual depreciation = Building value ÷ Useful life = $960,000 ÷ 40 = $24,000 per year.
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