You own some equipment that you purchased 4 years ago at a cost of $225,000. The
ID: 2659258 • Letter: Y
Question
You own some equipment that you purchased 4 years ago at a cost of $225,000. The equipment is 5-year property for MACRS. You are considering selling the equipment today for $87,000. Which one of the following statements is correct if your tax rate is 35 percent?
A.
The book value today is $186,120.
B.
The accumulated depreciation to date is $38,880.
C.
The taxable amount on the sale is $38,880.
D.
The aftertax salvage value is $70,158.
Please show work, thank you!
A.
The book value today is $186,120.
B.
The accumulated depreciation to date is $38,880.
C.
The taxable amount on the sale is $38,880.
D.
The aftertax salvage value is $70,158.
MACRS 5-year property year 1 2 3 4 5 6 Rate 20.00% 32.00% 19.20% 11.52% 11.52% 5.76%Explanation / Answer
The taxable amount on the sale is $38,880.
The taxable amount on the sale is $38,880.
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