What is the basis of the house for depreciation

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Reference no: EM131266472

$245,000 and the FMV today is $200,000. He is moving into his friends house and has decided to convert his residence to a rental property. Assume 20% of the property's value is allocated to land. Assume the transfer occured on 01/1/16

A. What is the basis of the house for depreciation?

B. If he claims depreciation for the next 6 years and sells the property for $260,000 (20% allocated to land), what is the realized and recognized gain/loss on sale of the house and land?

C. How much of the gain is due to depreciation?

D. If the FMV of the house is $290,000 on the day he converted to a rental property, what is the basis of the house for depreciation?

Reference no: EM131266472

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