Real Estate Math

A Minnesota residential rental property is purchased for $285,000 ($50,000 land, $235,000 building). Using straight-line depreciation over 27.5 years, what is the annual depreciation?

A$8,545.45✓ Correct
B$10,363.64
C$9,090.91
D$8,181.82

Explanation

Only the building is depreciated (land is not depreciable). Annual depreciation = $235,000 / 27.

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