Accounting what is the taxable income Suppose an asset has been sold for$110,000 after two years. The assethad an initial purchase price of$100,000, a gross income of $40,000,a current book value of $60,000, adepreciation amount of $10,000, anda tax rate of 50%. What is the taxableincome?

Step 1:- Define Taxable IncomeIn economics, taxable income is recognized as an individual's earnings…

Answered: Suppose an asset has been sold for…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 16DQ

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Assume the following: . A firm acquires an asset for $120.000 with a 5 year useful life and no salvage . The asset will generate $50,000 of cash flow for all five years . The tax rate is 20% . The firm will depreciate the asset over four years on a straight-line (SL) basis for tax purposes and over five years on a SL basis for financial reporting purposes. Taxable income in year 1 is: $26.000 $20.000 © $4.000
Southern inc. purchases an asset for 98,000. Thus asset qualifies as a 3 year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1= 33.33% year 2: 44.45% year 3= 14.81% and year 4 = 7.41%. Southern has a tax date of 25%. If the asset is sold at the end of 2 years for 29,000 what is the cash flow disposal ? 17,404 11,129 13,923 21,755 27,194
Compute the following. 1. Total gain. 2. Contract price. 3. Payments received in the year of sale. 4. Recognized gain in the year of sale and the character of such gain. а. (Hint: Think carefully about the manner in which the property taxes are han- dled before you begin your computations.) b. Same as parts (a)(2) and (3), except that Kay's basis in the property was $35,000.
5. Mark Corp. has taxable income of $10,000,000. They purchase $1,100,000 of qualified personal property this year. Considering code section 179 as well as bonus depreciation compute in good form the current year's maximum depreciation that can be taken.
7. After real estate has been sold by the state or the 6. What is the annual real estate tax on a property B. remain indefinitely in possession of the A. refinance the parcel of property sold. valued at $135,000 and assessed for tax purpos STIONS an at $47,250 with an equalization factor of 125% and a tax rate of 25 mills? A. $1,181 B. $1,477 C. $3,375 D. $4,219 7. After real estate has been sold by the state of u county to satisfy a delinquent real estate tax depending on state law, the former owner i have the right to A. refinance the parcel of property e property
1. A special manufacturing and handling device was purchased by Alfonso Manufacturing for $200,000 and is depreciated over MACRS. CFBT is estimated to amount to $800,000 for the first 2 years followed by $600,000 thereafter until the asset is retained. The effective tax rate, Te is 35% and interest is 10% per year. In present worth dollars determine the CFAT and determine if it was a viable purchase. (Note answer must be in a tabular format)
The MACRS depreciation allowances on 3-year property are 33.33%, 44.45%, 14.81%, and 7.41%, respectively. What is the amount of the depreciation for Years 1, 2, and 3 for a 3-year property with an initial cost of $64,000?
KNB sold real property to Firm P for $15,000 cash and Firm P’s assumption of the$85,000 mortgage on the property.Required: What is KNB’s amount realized on the sale?b. Compute KNB’s after-tax cash flow from the sale if its adjusted basis in the realproperty is $40,000 and its marginal tax rate is 35 percent.
Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Churchill has a tax rate of 30%. If the asset is sold at the end of four years for $40,000, what is the cash flow from disposal?
An asset purchased today at a cost of $50,000 is depreciated straight-line down to value 0 over a period of 5 years, for tax purposes. Suppose the asset is sold at a price of $30,000 at the end of 2 years. What is the after-tax cash inflow from salvage (selling the asset), assuming a tax rate of 40%? a) $30,000 b) $26,000 c) $38,000 d) $20,000 e) None of the above
What is the depreciation tax shield if EBIT is $1,500,000, depreciation expense is $200,000, interest expense is $300,000, and the tax rate is 25%? Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.
how did you get the Amortization Expense of 25,000

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Suppose an asset has been sold for $110,000 after two years. The asset had an initial purchase price of $100,000, a gross income of $40,000, a current book value of $60,000, a depreciation amount of $10,000, and a tax rate of 50%. What is the taxable income?