If Property B sold for $180,000 with an estimated land value of $80,000 and the RCN for the improvement is $200,000, what is the depreciation percentage?

To determine the depreciation percentage, it’s important first to establish the total value of the property before depreciation. The total value of Property B at sale is $180,000, which is the sale price.

Next, we need to understand the components of that value: the land value and the replacement cost new (RCN) of the improvements. The estimated land value is given as $80,000. To find the value of the improvement, we subtract the land value from the total sale price:

Improvement value = Total sale price - Land value

Improvement value = $180,000 - $80,000 = $100,000

Now, we have the RCN of the improvements as $200,000. To find the depreciation, we compare the value of the improvements at sale (which is calculated as $100,000) to the replacement cost new (RCN) of the improvements:

Depreciation = RCN - Improvement value

Depreciation = $200,000 - $100,000 = $100,000

To find the depreciation percentage, we take the amount of depreciation and divide it by the RCN and then multiply by 100 to convert it into a percentage:

Depreciation percentage = (