Monthly amortization deductions: | |
October: $120,000 divided by 60 | $2,000 |
November: $118,000 (that is, $120,000 minus $2,000) divided by 59 | 2,000 |
December: $116,000 (that is, $118,000 minus $2,000) divided by 58 | 2,000 |
Total amortization deduction for 1970 | 6,000 |
Yearly amortization deductions: | |
1970 (as computed in example (1)) | $6,000 |
1971 (computed in accordance with example (1)) | 24,000 |
1972 (for the first 5 months of 1972 computed in accordance with example (1)) | 10,000 |
Total amortization deductions for 20 months | 40,000 |
Adjusted basis as beginning of amortization period | 120,000 |
Less: Amortization deductions | 40,000 |
Adjusted basis as of June 1, 1972 | 80,000 |
Beginning as of June 1, 1972, the deduction for depreciation under section 167 is allowable with respect to the property on its adjusted basis of $80,000.
26 C.F.R. §1.169-1