Answer:
$2,425
Step-by-step explanation:
Value of House = $135,000
Value of Land = $35,000
Value of Building = $135,00 - $35,000
Value of Building = $100,000
As There is no depreciation on the Land, so value of building will be depreciated
Assumption:
Year end date is not mention in the question so I have assumed it as December 31, 2018.
Option for the question are also missing so for you reference original question's picture is attached please find that.
As depreciation percentage or useful life of the building is not given so I just copied this from the internet and solved the question accordingly.
Copied: "Research the MACRS recovery period for the property by determining its class. Residential rental property can be depreciated for 27.5 years. Commercial rental property can be depreciated over 39 years. You cannot depreciate a residential property that you have rented for more than 27.5 years."
Considering this House as residential rental property.
Depreciation for a year = 100,000/27.5 = $3,636
Depreciation for the year = (3,636/12) x 8 = $2,424
Nearest option is $2,425