On September 8, 2020, Holly purchased a residential apartment building. The cost basis assigned to the building is $197,400. Holly also owns another residential apartment building that she purchased on November 15, 2020, with a cost basis of $214,000. a. Calculate Holly's total depreciation deduction for the apartments for 2020 using MACRS.b. Calculate Holly's total depreciation deduction for the apartments for 2021 using MACRS. TABLE 8.5Straight-Line Depreciation for Real Property Assuming Mid-Month Convention*27.5-Year Residential Real PropertyThe applicable annual percentage is (use the column for themonth in the first year the property is placed in service):RecoveryYear(s)111.234679101213.4853.1822.8792.5762.2731.9701.6671.3641.0610.7580.4550.1522-183.6363.6363.6363.6363.6363.6363.6363.6363.6363.6363.6363.63619–273.6373.6373.6373.6373.6373.6373.6373.6373.6373.6373.6373.637281.9702.2732.5762.8793.1823.4853.6363.6363.6363.6363.6363.636290.0000.0000.0000.0000.0000.0000.1520.4550.7581.0611.3641.66739-Year Nonresidential Real PropertyThe applicable annual percentage is (use the column for themonth in the first year the property is placed in service):RecoveryYear(s)1234678910111212.4612.2472.0331.8191.6051.3911.1770.9630.7490.5350.3210.1072-392.5642.5642.5642.5642.5642.5642.5642.5642.5642.5642.5642.564400.1070.3210.5350.7490.9631.1771.3911.6051.8192.0332.2472.461*The official tables contain a separate row for each year. For ease of presentation, certain years are grouped together in thesetwo tables. In some instances, this will produce a difference of .001 percent when compared with the official tables.

Depreciation is the reduction in the worth of asset due to asset’s overuse, erosion or obsolescence.…

Answered: On September 8, 2020, Holly purchased a…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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On September 8, 2020, Holly purchased a residential apartment building. The cost basis assigned to the building is $197,400. Holly also owns another residential apartment building that she purchased on November 15, 2020, with a cost basis of $214,000.

a. Calculate Holly's total depreciation deduction for the apartments for 2020 using MACRS.

b. Calculate Holly's total depreciation deduction for the apartments for 2021 using MACRS.

TABLE 8.5
Straight-Line Depreciation for Real Property Assuming Mid-Month Convention*
27.5-Year Residential Real Property
The applicable annual percentage is (use the column for the
month in the first year the property is placed in service):
Recovery
Year(s)
11
1.
2
3
4
6
7
9
10
12
1
3.485
3.182
2.879
2.576
2.273
1.970
1.667
1.364
1.061
0.758
0.455
0.152
2-18
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
3.636
19–27
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
3.637
28
1.970
2.273
2.576
2.879
3.182
3.485
3.636
3.636
3.636
3.636
3.636
3.636
29
0.000
0.000
0.000
0.000
0.000
0.000
0.152
0.455
0.758
1.061
1.364
1.667
39-Year Nonresidential Real Property
The applicable annual percentage is (use the column for the
month in the first year the property is placed in service):
Recovery
Year(s)
1
2
3
4
6
7
8
9
10
11
12
1
2.461
2.247
2.033
1.819
1.605
1.391
1.177
0.963
0.749
0.535
0.321
0.107
2-39
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
2.564
40
0.107
0.321
0.535
0.749
0.963
1.177
1.391
1.605
1.819
2.033
2.247
2.461
*The official tables contain a separate row for each year. For ease of presentation, certain years are grouped together in these
two tables. In some instances, this will produce a difference of .001 percent when compared with the official tables.

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