Question

10. Hank bought a four-family residence for rental property. Hank put 20% down on the $300,000 rental unit. How much will he be able to depreciate
using the class recovery period for residential rental property each year?
A. $9,809.09
O B. $15,609.09
O C. $11,893.09
D. $10,909.09
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Answer 1

Answer:

D. $10,909.09

Step-by-step explanation:

The class recovery period for residential rental property each year = 27.5 years

The cost basis for the residential property = $300,000

The amount he will be able to depreciate

= Cost basis/ Number of years

= $300000/ 27.5 years

=$10, 909.090909

Approximately ≈ $10,909.09

Answer 2

The amount he will be able to depreciate  using the class recovery period for residential rental property each year is: D. $10,909.09.

Using this formula

Depreciation=Rental unit amount/ MACRS residential rental property recovery period

Where:

Rental unit amount=$300,000

MACRS Residential rental property recovery period=27.5 years

Let plug in the formula

Depreciation=$300,000/27.5

Depreciation=$10,909.09

Inconclusion the amount he will be able to depreciate  using the class recovery period for residential rental property each year is: D. $10,909.09.

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