1-During August of the prior year, Julio purchased an apartment building that he

Question

1-During August of the prior year, Julio purchased an apartment building that he used as a rental property. The basis was $1,400,000. Calculate the maximum depreciation expense during the current year?

2- putin corporation began business on september 23rd of the current year.it incurred 40000 of start up costs and 60000 of organizational expendures

1) how much may be immedialtely expensed for the year?

2) how much amortization may be deducted in the first year, rounded to the nearest whole number?

Explanation / Answer

Ans:-1).Depreciation is a non-cash expense used in accrual accounting in order to track the use of an asset. It is also used to better match revenues with expenses. Section 179 of the IRS code sets depreciation limits on property and vehicles. The code also set maximum limits on the amount that you can depreciate on the current tax year. The amount is influenced by the amount of new assets you put to use in the year. maximum depreciation expense = $ 1400,000 / 12 = $116666.67 depreciation per month to further understanding read the following link http://www.assetaide.com/depreciation/calculation.html

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