Question

when Marcus sent his daughter to college he purchased a house near campus for $95,000. Empty lots in the area sold for approximately $10,000 and the time. After she graduated Marcus decided to keep the house for use as a rental. The fair market value at the time of the conversion was $160,000 and the price of the land had risen to $20,000. The basis for depreciation of the house is

Answer 1

solution :
given that
when Marcus sent his daughter to college he purchased a house near campus for $95,000.
Empty lots in the area sold for approximately $10,000 and the time.
After she graduated Marcus decided to keep the house for use as a rental.
The fair market value at the time of the conversion was $160,000 and the price of the land had risen to $20,000.
The basis for depreciation of the house is :

As the FMV is more than the balanced premise of home consequently balanced premise will be the reason for the deterioration.

We need to take estimation of house barring land esteem
So basis for depreciation is $95000-10000= $85000