What's the depreciation schedule for a residential income-producing property?
A. 17 years
B. 27.5 years
C. 30 years
D. 39 years
Answer (2)
The problem requires identifying the correct depreciation schedule for a residential income-producing property.
According to IRS guidelines, the depreciation schedule is 27.5 years.
Comparing this with the given options, we find a match.
Therefore, the answer is 27.5 years .
Explanation
Understanding the Problem The question asks for the depreciation schedule (in years) for a residential income-producing property. We need to choose the correct option from the given list.
Identifying the Correct Depreciation Schedule According to IRS guidelines, the depreciation schedule for a residential income-producing property is 27.5 years.
Comparing with the Options Comparing the depreciation schedule obtained from the IRS guidelines with the given options, we find that 27.5 years is one of the options.
Final Answer Therefore, the correct depreciation schedule for a residential income-producing property is 27.5 years.
Examples
Understanding depreciation schedules is crucial for real estate investors. For instance, if you own a rental property, knowing the depreciation schedule allows you to deduct a portion of the property's cost each year, reducing your taxable income. This can significantly impact your cash flow and overall investment returns. For example, if you purchased a rental property for $275,000, you could deduct $10,000 per year ($275,000 / 27.5 years) as depreciation expense.
The depreciation schedule for a residential income-producing property is 27.5 years, according to IRS guidelines. This allows property owners to deduct a portion of the property's cost from their taxable income each year. Thus, the answer is B: 27.5 years.
;
