APPENDIX B

REAL ESTATE FORMULAS: SUMMARIZING THE ESSENTIALS

Accelerated Depreciation

(B ÷ P) * R = D

where:

B

= basis of asset

P

= period (in years)

R

= acceleration percentage

D

= annual depreciation

Accumulated Value of 1

(R + 1)n * P = A

where:

R

= periodic interest rate

n

= periods

P

= principal amount

A

= amount accumulated (principal plus interest)

Accumulated Value of 1 per Period

[D [(1 + R )n – 1] ÷ R] * P = A

where:

D

= periodic deposit amount

R

= periodic interest rate

n

= number of periods

P

= principal

A

= accumulated value of 1 per period

Adjusted Basis in Property

P + C – D = B

where:

P

= purchase price

C

= closing costs

D

= deferred gain

B

= basis in property

Adjusted Purchase ...

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