Macrs depreciation system, Financial Accounting

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Real estate depreciated under MACRS rules is subject to cost recovery using a mid-year convention.

Mike converted his personal residence (acquired in 2001) to rental property this year. At the time of the conversation, the property had a basis of $260,000. The fair market value of the property at conversion was $190,000. Mike's basis for depreciation at conversion is $260,000.

The cost of motion picture films and video tapes can be recovered using the MACRS depreciation system.


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