A residence was constructed in 1986 for $72,000 on a lot thatcost $14,000. Before the property was converted to rental use inthe current year, a finished porch costing $8,000 was added and a$3,000 casualty loss was claimed. If the fair market value on thedate of conversion to rental use was $84,000 ($74,000 for the houseand $10,000 allocated for the land), what is the depreciablebasis?
- A.$84,000
- B.$74,000
- C.$72,000
- D.$77,000
During the current year, Liquid Corporation, a calendar-yeartaxpayer, purchased and placed in service the following assets onthe following dates:
Machine | $ Â Â 6,400 | February 1 |
Truck | 20,000 | October 15 |
Computer | 8,000 | December 1 |
The three assets are all 5-year property under MACRS. The Sec.179 and bonus depreciation deductions were not elected. What isLiquid’s depreciation deduction?
- A.$1,720
- B.$3,440
- C.$6,880
- D.$3,640
