: Assume 40% ordinary and capital gains tax rates. Book value and taxes on sale of assets Troy Industries purchased a new machine 4 year(s) ago for $78,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $93,600; $54,600; $13,260, and $9,300. a. The remaining book value is $ 3900). (Round to the nearest dollar.) b. Calculate the firm's tax liability for each case: (Round to the nearest dollar.) i Data Table - X Total Sale Price 93,600 $ Capital Tax on Gain Capital Gain 89700 $ Depreciation Recovery $ Tax on Recovery Tax $ $ $ D (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) (Round to the nearest dollar.) Sale Price 54,600 $ Capital Gain Tax on Capital Gain Depreciation Recovery $ Tax on Recovery Total Tax Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* Recovery year 3 years 5 years 7 years 33% 20% 14% 45% 32% 25% 15% 19% 18% 7% $ $ FNM 10 years 10% 18% 14% 12% (Round to the nearest dollar.) 12% 12% 9% Sale Price 13,260 $ Capital Gain 8% Tax on Capital Gain $ Depreciation Recovery $ D D Tax on Recovery s Total Tax D 7% 6% 6% (Round to the nearest dollar.) 10 6% 11 Sale Price 9,300 $ Capital Gain Tax on Capital Gain $ Depreciation Recovery $ Tax on Recovery Total Tax 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. $ $ Print Done : Assume 40% ordinary and capital gains tax rates. Book value and taxes on sale of assets Troy Industries purchased a new machine 4 year(s) ago for $78,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $93,600; $54,600; $13,260, and $9,300. a. The remaining book value is $ 3900). (Round to the nearest dollar.) b. Calculate the firm's tax liability for each case: (Round to the nearest dollar.) i Data Table - X Total Sale Price 93,600 $ Capital Tax on Gain Capital Gain 89700 $ Depreciation Recovery $ Tax on Recovery Tax $ $ $ D (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) (Round to the nearest dollar.) Sale Price 54,600 $ Capital Gain Tax on Capital Gain Depreciation Recovery $ Tax on Recovery Total Tax Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* Recovery year 3 years 5 years 7 years 33% 20% 14% 45% 32% 25% 15% 19% 18% 7% $ $ FNM 10 years 10% 18% 14% 12% (Round to the nearest dollar.) 12% 12% 9% Sale Price 13,260 $ Capital Gain 8% Tax on Capital Gain $ Depreciation Recovery $ D D Tax on Recovery s Total Tax D 7% 6% 6% (Round to the nearest dollar.) 10 6% 11 Sale Price 9,300 $ Capital Gain Tax on Capital Gain $ Depreciation Recovery $ Tax on Recovery Total Tax 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention. $ $ Print Done
