Question

Farrah Investor purchased an apartment building (including land) for $2,000,000 and placed it in service on December 27, 2017. The land is valued at $1,000,000, and the building is valued at $1,000,000. Farrah depreciated the property under MACRS GDS. What is Farrah's tax depreciation deduction for 2017?

Answer 1

In the initial year of placing the building in service,
the property (exempted land value) is depreciable
on monthly basis and the property which is placed
on rent in the month of December is subject to
depreciation of 0.152%.
Ferrah's tax depreciation deduction for 2017 =
(total value2000000 - land value 1000000)* dep. Rate 0.152%
1000000 * 0.152% = 1520

Note:

The IRS provides the following table for use during the year you acquire a property:

Month the Property Was Put Into Service	Cost Basis Percentage You Can Depreciate
January	3.485%
February	3.182%
March	2.879%
April	2.576%
May	2.273%
June	1.970%
July	1.667%
August	1.364%
September	1.061%
October	0.758%
November	0.455%
December	0.152%

Data source: IRS.