On March 3, 2018, Matt purchased and placed in service a building costing $12,000,000. The building...

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On March 3, 2018, Matt purchased and placed in service a building costing $12,000,000. The building has 10 floors. The bottom

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Answer 1

Answer #1

$315,024

The gross rents from the apartments are not 80% or more of the total gross rents and hence, the whole building cannot be treated as residential rental real estate.

Residential [(70% × $12,000,000) ×.02879] = $241,836

Nonresidential [(30% ×$12,000,000) ×.02033] = 73,188

Total cost recovery $315,024

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Answer 2

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