TaraTara

owns a house that she has been living in for eight years. She purchased the house for

$ 260 comma 000$260,000

and the FMV today is

$ 230 comma 000.$230,000.

She is moving into her friend's house and has decided to convert her residence to rental property. Assume

10 %10%

of the property's value is allocated to land.Read the requirements

LOADING...

Requirement a. What is the basis of the house for depreciation?

The basis of the house for depreciation is $207,000

Requirement b. If she claims depreciation of $20,700

and sells the property six years later for $275,000 (10 % allocated to land), determine the gain on the sale of the building and gain on the sale of the land.

First select the formula labels and then calculate the realized gain or loss. (Use a parentheses or a minus sign to show a loss.)

		House	Land
Amount realized		$247,500	$27,500
Less:	Adjusted basis	?	?
Realized gain (loss) Requirement c. How much of the gain is due to depreciation?		?	?