Asked by Courtnie Marie on Jun 15, 2024
Verified
Lateefah purchased a new office building on April 1,2017,for $3,000,000.On August 20,2021,the building was sold.What is the cost recovery deduction for the year of purchase and the year of sale?
Cost Recovery Deduction
A deduction that allows a taxpayer to recover the cost of an investment over time, such as through depreciation or amortization.
- Acquire knowledge on the basics of cost recovery deductions and their implementation across different asset types.
- Acquire knowledge about the basic principles of depreciation, embracing the norms and approaches suitable for assorted asset types.
Verified Answer
TD
Tùng D??ngJun 19, 2024
Final Answer :
Year of purchase: $3,000,000 × .01819 = $54,570.
Year of sale: $3,000,000 × .02564 × 7.5/12 = $48,075.
Year of sale: $3,000,000 × .02564 × 7.5/12 = $48,075.
Learning Objectives
- Acquire knowledge on the basics of cost recovery deductions and their implementation across different asset types.
- Acquire knowledge about the basic principles of depreciation, embracing the norms and approaches suitable for assorted asset types.
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