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On April 3, 2022, Terry purchased and placed in service a building that cost $2,000,000. An appraisal determined that 25%

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On April 3, 2022, Terry purchased and placed in service a building that cost $2,000,000. An appraisal determined that 25% of the total cost was attributed to the value of the land. The bottom floor of the building is leased to a retail business for $32,000. The other floors of the building are rental apartments with an annual rent of $160,000. Determine Terry’s cost recovery deduction for 2022.

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The building meets the 80 gross receipts from dwelling units test Therefore it is classified as residential real property The buildings depreciable ba…View the full answer


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South Western Federal Taxation 2023 Comprehensive Volume

South Western Federal Taxation 2023 Comprehensive Volume

ISBN: 9780357719688

46th Edition

Authors: Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young

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Question Details
Chapter # 8- Depreciation, Cost Recovery, Amortization, and Depletion
Section: Discussion Questions
Problem: 35
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Question Posted: September 24, 2023 06:48:43
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