One of your client BC LLC bought an apartment complex on 01/01/2004. Total Cost of apartment including land was $8,726,210. Accumulated Depreciation as of 12/31/2014 was 4,513,597. BC refinanced the entire loan in 2009. Loan origination cost in 2009 was 333,777 and as of 12/31/2014 accumulated loan amortization was 109,934. Mortgage balance on 12/31/2014 was 3, 689,932.
On June 1, 2015 Tornedo hit the apartment complex and caused a considerable damage. Half the units became inhabitable. BC returned the security deposits of the tenants and the tenants moved out. Only half of the units are rented out since July 1, 2015.
The insurance company so far has paid $2.5 million. BC is expected to receive in 2016 $ 1,000, 000 for loss of rental income and damage to property BC paid $721,000 for asbestos removal and paid to 3% of $2.5 million to adjuster. BC also paid 22,000 for environment cleanup.