Question

How does depreciation impact basis

Question 20 of 75. When Marcus sent his daughter to college, he purchased a house near campus for $95,000. Empty lots in the area sold approximately $10,000 at 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 $140,0o0 $105,000 o $95,000 o $85,000 □Mark for @llow up

Answer 1

Solution :-

From the given information we need to find out the basis depreciation of the house .

$\rightarrow$ As the FMV is more than the fair preface of home thus adjusted introduce will be the explanation behind the weakening.

Now ,

The basis depreciation of the house = $95000-10000

= $85000

The basis depreciation of the house = $85,000

The final answer is $85,000 .