MORE MATH PROBLEMS

PROBLEM:

A complex comprising 200 apartment units was successfully sold for a cumulative sum of $4,000,000. The expenses linked to closing the sale reached $56,300, and the land's value represents 25% of the entire property's worth. Concerning income tax considerations, what stands as the acceptable annual depreciation expense that can be asserted?

SOLUTION:

4,000,000 + 56,300 = 4,056,300

4,056,300 X 75% = 3,042,225

3,042,225 / 27.5 = $110,626.36 Yearly

(Straight line depreciation: residential = 27.5 non-residential = 39.0)