You purchased an automated mailing system which cost $50,000 five years ago. At that time, the system was
estimated to have a service life of 5 years with salvage value of $5,000. These estimates are still good. The
property has been depreciated according to a 5-year MACRS property class. Now (five years from purchase)
you are considering selling the system at $10,000.
(a) What book value should you use in determining the taxable gains?
(b) What is the net proceeds from sale, assuming that the tax rate is 35%?

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The Answer of You purchased an automated mailing system which cost $50,000 five years ago. At that time, the system was
estimated to have a service life of 5 years with salvage value of $5,000. These estimates are still good. The
property has been depreciated according to a 5-year MACRS property class. Now (five years from purchase)
you are considering selling the system at $10,000.
(a) What book value should you use in determining the taxable gains?
(b) What is the net proceeds from sale, assuming that the tax rate is 35%?

You Purchased an Automated Mailing System Which Cost $50,000 Five