A warehouse was purchased for $9MM ($2MM down +$7MM loan) 5 years ago and is recently sold for $10.1MM gross sales price. Assume the following: • 27% of the purchase price was attributable to land value • the current mortgage balance is $6.1MM • 25% tax rate on accumulated depreciation • 15% tax rate on capital gain. • 5% selling cost. What is the tax due on depreciation recapture at sale?

A warehouse was purchased for $9MM ($2MM down +$7MM loan) 5 years ago and is recently sold for $10.1MM gross sales price. Assume the following: • 27% of the purchase price was attributable to land value • the current mortgage balance is $6.1MM • 25% tax rate on accumulated depreciation • 15% tax rate on capital gain. • 5% selling cost. What is the tax due on depreciation recapture at sale?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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