Sale capital tax on depreciation tax on total price

This preview shows page 2 - 4 out of 5 pages.

Sale Capital Tax on Depreciation Tax on Total Price Gain Capital Gain Recovery Recover y Tax 26,200 0 $ 0 $ -11,240 $ -4,496 $ -4,496 Troy Industries purchased a new machine 3 year(s) ago for $84,000.  It is being depreciated under MACRS with  a 5-year recovery period using the schedule  Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* Recovery year 3 years 5 years 7 years 1 33% 20% 14% 2 45% 32% 25% 3 15% 19% 18% 4 7% 12% 12% 5 12% 9% 6 5% 9% 7 9% 8 4% 9 10 11 Totals 100% 100% 100% Assume 40% ordinary and capital gains tax rates. a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $100,800; $58,800;  $24,360; and $17,100 a. The remaining book value is 24,360. (Round to the nearest dollar.) b. Calculate the firm's tax liability for each case: (Round to the nearest dollar.)
Sale Capital Tax on Depreciation Tax on Total Price Gain Capital Gain Recovery Recovery Tax 58,800   0 0   34,440 13,776 13,776 Sale Capital Tax on Depreciation Tax on Total Price Gain Capital Gain Recovery Recovery Tax 24,360 0 0 0 0 0 Sale Capital Tax on Depreciation Tax on Total Price Gain Capital Gain Recovery Recovery Tax 17,100 0 $ 0 $ -7,260 $ -2,904 $ -2,904

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture