Suppose you sell a fixed asset for $99,000 when its book value is $75,000. If your company's marginal tax rate is 39 percent, what is the gain or loss on the sale of the asset?

Question

Quizplus · Accepted Answer

The gain on the sale is $99,000 - $75,000 = $24,000. Since this is a gain, it is subject to tax. However, the question only asks for the gain or loss, not the after-tax gain. Therefore, the gain is $24,000.

Suppose You Sell a Fixed Asset for $99,000 When Its