fall_2009_part_3_property_transactions_template

fall_2009_part_3_property_transactions_template - Black...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Real estate transactions Transaction: Cash sale Present value of cash outflows: Cost of new warehouse (370,000) Land cost 80,000 Warehouse cost 270,000 Less: Accumulated depreciation (69,228) Adjusted basis 280,772 Selling price 400,000 Gain on sale 119,228 PV of $1 (i=10%, n=1) 0.909091 PV of gain 108,389 Marginal tax rate 34% 36,852 (36,852) Land cost 74,000 Warehouse cost 296,000 Less: Accumulated depreciation (227,683) Adjusted basis 142,317 Selling price 175,000 Gain on sale 32,683 PV of $1 (i=10%, n=30) 0.057309 PV of gain 1,873 Marginal tax rate 34% 637 (637) Present value of cash inflows or tax benefits: Sales proceeds 400,000 Tax benefit from depreciation 370,000 % allocated to warehouse 80% Allocated to warehouse 296,000 MACRS rate 2.564% Annual depreciation 7,589 PV annuity (i=10%,n=30) 9.426914 PV of total depreciation 71,545 Marginal tax rate 34% 24,325 24,325 Salvage value 175,000 PV of $1 (i=10%, n=30) 0.057309 10,029 10,029
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/04/2010 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

Page1 / 4

fall_2009_part_3_property_transactions_template - Black...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online