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Depreciation is question's topic, pls. To reroof a rental it cost $1,500 in materials, and $2,000 in labor. What should be depreciated? $1,500? $2,000? Or $3,500, pls?

 
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Depreciation is question's topic, pls. To reroof a rental it cost $1,500 in materials, and $2,000 in labor. What should be depreciated? $1,500? $2,000? Or $3,500, pls?

You are buying a "roof", not its cost components.  So its cost to you is $3,500.

Tom Young

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Depreciation is question's topic, pls. To reroof a rental it cost $1,500 in materials, and $2,000 in labor. What should be depreciated? $1,500? $2,000? Or $3,500, pls?

Thanks, Tom. I appreciate your answer. Makes sense with your explanation.

View solution in original post

2 Replies

Depreciation is question's topic, pls. To reroof a rental it cost $1,500 in materials, and $2,000 in labor. What should be depreciated? $1,500? $2,000? Or $3,500, pls?

You are buying a "roof", not its cost components.  So its cost to you is $3,500.

Tom Young

Depreciation is question's topic, pls. To reroof a rental it cost $1,500 in materials, and $2,000 in labor. What should be depreciated? $1,500? $2,000? Or $3,500, pls?

Thanks, Tom. I appreciate your answer. Makes sense with your explanation.

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