Rafael Bought an Apartment Building on March 27,2010,at a Cost

question 2

Multiple Choice

Rafael bought an apartment building on March 27,2010,at a cost of $2,000,000 (exclusive of the cost allocated to the land) .He sells the building on November 3,2016.What is Rafael's cost recovery deduction on the building for 2016 if he wants to take the maximum deduction allowable on the building?

• A)$44,870
• B)$63,630
• C)$66,660
• D)$69,690
• E)$72,740

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Definitions:

Comprehensive Income

Total change in equity for a reporting period that includes all non-owner changes in equity, not just those resulting from net income.

Net Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, leading to the net income or profit.

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash transaction happens.

Revenue Recognition

The accounting principle that dictates the specific conditions under which income becomes realized as revenue.