Three years ago,Stock Tek purchased some five-year MACRS property for $67,400.Today,it is selling this property for $28,000.How much tax will the firm owe on this sale if the tax rate is 35 percent? The MACRS allowance percentages are as follows,commencing with year 1:
20)00,32.00,19.20,11.52,11.52,and 5.76 percent.

Question

Quizplus · Accepted Answer

Tax on salvage value = [$28,000 - $67,400 × (1 - 0.20 - 0.32 - 0.192)] × 0.35 = $3,006

Three Years Ago,Stock Tek Purchased Some Five-Year MACRS Property for $67,400.Today,it