Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Book value and taxes on sale of assets Troy Industries purchased a new machine 5 year(s) ago for $84,000. It is being depreciated under MACRS
Book value and taxes on sale of assets
Troy Industries purchased a new machine 5 year(s) ago for $84,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule:
Assume 21% ordinary and capital gains tax rates.
The remaining book value is $4200.
Calculate the capital gain, tax on capital gain, depreciation recovery, and tax on recovery to find the total tax, if the machine sold for each of the following amounts:
$58,800;$4,200; and $2,900.
Please provide work for an upvote.
For example: If the machine sold for 100,800:
Percentage by recovery year* \begin{tabular}{ccccc} Recovery year & 3 years & 5 years & 7 years & 10 years \\ \hline 1 & 33% & 20% & 14% & 10% \\ 2 & 45% & 32% & 25% & 18% \\ 3 & 15% & 19% & 18% & 14% \\ 4 & 7% & 12% & 12% & 12% \\ 5 & & 12% & 9% & 9% \\ 6 & & 5% & 9% \\ 7 & & 4% & 7% \\ 8 & & & 6% \\ 9 & & & 6% \\ 10 & & & & 6% \\ 11 & 100% & & & 4% \\ Totals & & & & 100% \end{tabular}Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started