Question

Paragon Properties built a shopping center at a cost of $50M in year 2010. The company...

Paragon Properties built a shopping center at a cost of $50M in year 2010. The company started leasing space in July of 2014. The land was purchased for $5M. Determine the depreciation charges through 2017 if the property was sold in November 2017.

Homework Answers

Answer #1

Solution :-

Year Cost Rate Depreciation
2014

= $50 M - $5 M

= $45 M

1.177%

= 1.177% * $45 M

= $529,650

2015 $45 M 2.564%

= $45 M * 2.564%

= $1,153,800

2016 $45 M 2.564%

= $45 M * 2.564%

= $1,153,800

2017 $45 M 2.564%

= $45 M * 2.564%

= $1,153,800

= $1,153,800 + $1,153,800 + $1,153,800 + $529,650

= $3,991,050

Depreciation charges through 2017 = $3,991,050 .

Note :-

That rates taken from the MACRS table for Nonresidential Real Property (39 years) .

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