Real Estate Math
A property depreciates at a straight-line rate over 27.5 years for tax purposes. If the building value is $220,000, what is the annual depreciation deduction?
A$8,000✓ Correct
B$6,000
C$10,000
D$8,727
Explanation
Annual depreciation = $220,000 / 27.5 = $8,000 per year. The IRS allows residential rental property to be depreciated over 27.5 years using the straight-line method.
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