Real Estate Math
A Maine property's building is worth $250,000 with a 40-year economic life. Using straight-line depreciation, the annual depreciation for income tax purposes (residential rental is 27.5 years per IRS) is approximately:
A$6,250
B$7,273
C$9,091✓ Correct
D$10,000
Explanation
IRS residential rental depreciation = $250,000 ÷ 27.5 years = $9,091 per year. Using the values given ($250,000), apply the appropriate formula.. The correct answer is $9,091.. This is a common calculation on the Maine real estate exam.
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