-d a property for his For $100,000. At the tax assessment allo erty value to the lan d, Erik decided to ke TI.
-d a property for his For $100,000. At the tax assessment allo erty value to the lan d, Erik decided to ke TI.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 54P
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Question
Transcribed Image Text:When Erik's son went to college, he
purchased a property for his son near
campus for $100,000. At the time, the
property tax assessment allocated 10% of
the property value to the land. After his son
graduated, Erik decided to keep the house
for use as a rental. The fair market value at
the time of the conversion was $150,000,
but now the tax assessment allocated 35%
to land value. The basis for depreciation of
the house is
$90,000
$97,500
$100,000
$150,000
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