contestada

A taxpayer purchases real estate rental property for $150,000. She pays $25,000 cash and obtains a mortgage for $125,000. She pays closing costs of $8,000, which includes $4,000 in points on the mortgage and $4,000 for closing fees and title costs. The basis in the property is:

a. $33,000 depreciation , $125,000 amortization
b. $158,000 depreciation only
c. $154,000 depreciation, $4,000 amortization
d. $150,000 depreciation, $8,000 Amortization

Respuesta :

jepessoa

Answer:

c. $154,000 depreciation, $4,000 amortization

Explanation:

The basis of the rental real estate property = purchase price + closing costs (excluding the cost of mortgage points)  = $150,000 + $4,000 = $154,000

You can amortize the cost of the closing points for a period equal to the length of the mortgage loan (or up to 30 years if the length of the loan is longer).