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Unformatted text preview: real estate taxes of $5,000 in the current year. What is the total depreciable
basis of Dove's business property?
Choice "a" is correct. The only amount that may be depreciated is the $100,000 that Dove spent to
construct the building. The $50,000 cost of the land is not depreciable as land is not a depreciable asset.
The fair market value of the land ($60,000) is irrelevant for depreciation purposes. The real estate taxes
($5,000) are a deductible expense to the business that would not be capitalized.
Choice "b" is incorrect. The cost of the land is not a depreciable expense.
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Becker CPA Review, PassMaster Questions
Lecture: Regulation 3 Choice "c" is incorrect. The cost of the land is not a depreciable expense. The real estate taxes ($5,000)
are a deductible expense to the business that would not be capitalized.
Choice "d" is incorrect. The fair market value of the la...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.
- Fall '10
- The Land