Lento Incorporated owned machinery with a $30,000 initial cost basis. Accumulated book depreciation with respect to the machinery was $12,000, and accumulated tax depreciation was $19,100. Lento sold the machinery for $13,000 cash. Lento’s marginal tax rate is 21 percent. Required: b. Compute Lento’s tax gain or loss on the sale. c. Compute Lento’s after-tax cash flow from the sale.

Lento Incorporated owned machinery with a $30,000 initial cost basis. Accumulated book depreciation with respect to the machinery was $12,000, and accumulated tax depreciation was $19,100. Lento sold the machinery for $13,000 cash. Lento’s marginal tax rate is 21 percent. Required: b. Compute Lento’s tax gain or loss on the sale. c. Compute Lento’s after-tax cash flow from the sale.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 44P

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