Five years ago you purchased a small apartment complex for $1 million. You borrowed $700,000 at 7 percent for 25 years with monthly payments. The original depreciable basis was $750,000 and you have used 27-year straight-line depreciation over the five-year holding period. Assume there was no personal property associated with the acquisition and no capital expenditures have been made since acquisition. The property could be sold today for $1,270,000 in a fully taxable sale. Ignore the increased taxes due on sale. Assume 6 percent selling costs, 33 percent ordinary tax rate, a 15 percent capital gain tax rate, and a 25 percent recapture rate. Ignore the midmonth convention.

Required:

How much were your taxes from rental operations reduced by the annual depreciation deductions over the entire five-year holding period?