Given the following information, calculate after-tax cash flow for year 1. Assuming a sales price of $1,100,000,
Question:
Given the following information, calculate after-tax cash flow for year 1. Assuming a sales price of $1,100,000, calculate the after-tax cash flow from the sale (don’t forget the depreciation recapture.) Finally, calculate the after-tax IRR for the investment.
Purchase Price: $900,000
Loan: $750,000, 5%, 25 years (annual payments)
Year 1 NOI: $100,000
Year 2 ATCF: $33,000
Year 3 ATCF: $34,000
Use an 85/15 ratio for depreciation. 39 year, straight line.
35% tax rate on income, 15% on long-term capital gains, 25% depreciation recapture.
What is the after-tax cash flow from the sale at the end of year 1? $31,776.04
What is the after-tax cash flow from the sale at the end of year 3?
Personal Finance
ISBN: 978-0077861643
11th edition
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes