Improvement cost new is $500,000. Separately supported improvement depreciation deductions of $125,000 are expressly nonoverlapping and not already excluded from cost new. No site is included. What depreciated improvement amount results?
Correct Answer
B) $375,000
500000−(125000)+0 = 375000. Common errors: not deducting the depreciation gives $500,000; dividing cost new by 0.75 instead of deducting the depreciation gives $666,667; reporting the depreciation instead of the depreciated amount gives $125,000.
Why This Is the Correct Answer
500000−(125000)+0 = 375000. Common errors: not deducting the depreciation gives $500,000; dividing cost new by 0.75 instead of deducting the depreciation gives $666,667; reporting the depreciation instead of the depreciated amount gives $125,000.
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