Question

Question 33 of 75 In April 2017, Reiko purchased and placed a rental house in service. She paid $184,000, including $27,000 for the land. Compute her 2017 depreciation on the rental. O $3,531 O $4,044 O $4,138 O $4,738 Mark for follow up

Answer 1

As the house is rented out depreciation is allowed on the house by the IRS. Therefore first we need to calculate the value of the house for that purpose we need to deduct the value of the land from the total value of the house so value of the house will be as follows $184,000-$27000= $157,000.

Under the IRS they have given the rate of Deprecation of the rented property under the method general Depreciation systems or GDS the value are as follows

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%

the depreciation that will be allowed that year will be when the property was rented out therefore as we can see from the question that the property was rented from the month of April and we already know the value of the property therefore depreciation that will be allowed that year will be as follows $157,000*2.576%=$4,044.32. Option B is the correct one.