Real Estate Math
An investor buys a rental property for $200,000 and depreciates the building (valued at $160,000) over 27.5 years. What is the annual depreciation deduction?
A$5,455
B$5,818✓ Correct
C$7,273
D$8,000
Explanation
Annual depreciation = Building value / Useful life = $160,000 / 27.5 = $5,818.18. The land ($40,000) is not depreciable.
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