n 2016 Gabby purchased and placed into service equipment used in her business as a cost of $ 800,000. Because of new technology, this equipment was not useful after a few years, so Gabby sold the equipment in 2020 for $ 5,000. At the time of the sale, Gabby had claimed accumulated tax depreciation of $ 340,000 on this equipment. Assume that Gabby has substantial income and has a 2020 marginal ordinary income tax rate of 37% and a marginal net capital gain rate of 20%, how much tax will Gabby save due to the loss on the sale of this asset?
n 2016 Gabby purchased and placed into service equipment used in her business as a cost of $ 800,000. Because of new technology, this equipment was not useful after a few years, so Gabby sold the equipment in 2020 for $ 5,000. At the time of the sale, Gabby had claimed accumulated tax depreciation of $ 340,000 on this equipment. Assume that Gabby has substantial income and has a 2020 marginal ordinary income tax rate of 37% and a marginal net capital gain rate of 20%, how much tax will Gabby save due to the loss on the sale of this asset?
Chapter8: Depreciation And Sale Of Business Property
Section: Chapter Questions
Problem 16MCQ
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Question
In 2016 Gabby purchased and placed into service equipment
used in her business as a cost of $ 800,000. Because of new
technology, this equipment was not useful after a few years, so
Gabby sold the equipment in 2020 for $ 5,000. At the time of the
sale, Gabby had claimed
340,000 on this equipment. Assume that Gabby has substantial
income and has a 2020 marginal ordinary income tax rate of
37% and a marginal net
will Gabby save due to the loss on the sale of this asset?
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ISBN:
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Author:
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Publisher:
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