"Steve M" <stephen.moore[at]REMOVETOREPLYipa.net> wrote in message
news:q24lj4llid7k7ss4nko1eggmefa460pd2t[at]4ax.com...
- quote -

I believe it's group policy NOT to do your homework for you.


========================================= MODERATOR'S COMMENT:
- agreed. Thread is closed.

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We're doing some problems for our yearly tax courses and I'm having
problems determining the answer to the following scenerio. It has to
do with land and depreciation. I know you can't depreciate land but
the boulder removal has me stumped and reading the IRS rules doesn't
make it clear if depreciation is allowd. The answer in parenthesis is
what I think the answer would be if depreciation is allowed. Anyone
want to do weigh in or give me some help?

- - - - - - - - S c e n e r i o - - - - -

Cassandra Martini (age 49, born 01-28-1958, SSN 400-00-1803) is
single. Cassandra owns a vacant piece of land in Vistoe, Colorado,
that she rents. Cassandra bought the land on August 21,1999, for
$18,000, and began renting it December 14, 2002. In January, she paid
$500 to have some large boulders removed, and she paid real estate
taxes of $450. Cassandra flew to Vistoe to inspect the property and
negotiate a new lease. She received $1,000 upon signing, which
represented $500 rent for the fi rst year and $500 to be held for the
last year’s rent. Her airfare was $305, the motel was $89, and her
meals were $48.

- - - - - Questions / Answers - - - - - -

1. What is the total amount of rent on Sch E line 3?
a. 1,000
2. What are the expenses, excluding depreciation, Cassandra has for
the land on Sch E Line 19?
a. 1,344 (844)
3. What is the total depreciation expense Cassandra can claim on Sch
E Line 20?
a. 0 (17)
4. What amount of rental income or loss is reported on Form 1040 Line
17?
a. -344 (139)

Thanks for any help.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >