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Discuss the Criteria Used to Determine Whether a Building Is

question 10

Essay

Discuss the criteria used to determine whether a building is residential or nonresidential realty.Also explain the tax consequences resulting from this determination if the property is placed in service in 2016.


Definitions:

Income Effect

The change in consumption that results from changes in real income, affecting the purchasing power of consumers.

Substitution Effect

The economic understanding that as prices rise or income decreases, consumers replace more expensive items with less costly alternatives.

Wage Increase

A rise in the rate of pay employees receive for their work.

Leisure

Free time not taken up by work, during which individuals can engage in activities of their choice for relaxation or pleasure.

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