Lorenzo owns two apartment buildings. He acquired Forsythia Acres on February 21, 1998, for $300,000 ($90,000 allocated

Question:

Lorenzo owns two apartment buildings. He acquired Forsythia Acres on February 21, 1998, for $300,000 ($90,000 allocated to the land) and Square One on November 12, 2014, for $800,000 ($100,000 allocated to the land). Neither apartment complex qualifies as low-income housing. If Lorenzo elects to write off the cost of each building as quickly as possible, what is the effect of depreciation (cost recovery) on his AMTI for:
a. 1998?
b. 2014?