Answer:
$5,400
Explanation:
Calculation to determine the estimated average income
Using this formula
Estimated average income=Expected total income yield/Useful life
Let plug in the formula
Estimated average income= $21,600 ÷ 4
Estimated average income= $5,400
Therefore the estimated average income is $5,400
The answer to your question is accounting and purchasing
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Answer:
The customer's tax basis is:
$20,000.
Explanation:
The non-recourse notes of $20,000 do not provide basis for the customer's tax. Since the partnership cannot recover beyond the secured property, a non-recourse note is not a qualified basis. IRS Section 752 rules apply to non-recourse liabilities. A non-recourse note provides the basis for partnership distributions but generally do not provide basis for at-risk rules.
Answer:
$5,681
Explanation:
As this is a residential property the Modified Accelerated Cost Recovery System (MACRS) depreciation rate is applicable.
Also as it was sold during the month, the mid month convention is also in effect which states that when an asset is sold during the month, only 15 days of that month are considered for depreciation assuming a 30 day month.
The straight line rate for MACRS after the first year for this residential property is 3.636% per annum.
The asset didn't last the entire year so this needs to be accounted for.
Out of 12 months it lasted 7 months till July and 15 days in August which means it lasted 7.5/12 of the year.
Depreciation for the year is, therefore,
= 250,000 * 3.636% * 7.5/12
= $5,681
