Given the following information, calculate the taxes due on sale for the following fully taxable sale. Net Sale Proceeds: $1,500,000, Adjustable Basis: $830,000, Depreciation Recapture: $150,000, Capital Gain Tax: 15%, Depreciation Recapture tax: 25%.

Question

Quizplus · Accepted Answer

The taxes due on the sale can be calculated by first determining the total gain, which is the net sale proceeds minus the adjustable basis, giving us $1,500,000 - $830,000 = $670,000. From this, the depreciation recapture portion is taxed at 25%, so $150,000 * 25% = $37,500. The remaining gain, $670,000 - $150,000 = $520,000, is subject to capital gains tax at 15%, so $520,000 * 15% = $78,000. Adding both tax amounts gives us $37,500 + $78,000 = $115,500.

Given the Following Information, Calculate the Taxes Due on Sale