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help please Compute the atter-tax cash fow from the sale of the following nonresidential property. The market value of the property increased to $420,000 over
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Compute the atter-tax cash fow from the sale of the following nonresidential property. The market value of the property increased to $420,000 over the trreeyear holding period. Seling costs are 7% of the sales price. The imvestor is in the 32% ordinary lax brocket, Capilal gains will be taxed at 15%. Depreciation recopture taxed at 25% The baiance of the loan at the time needs to be computed. 20% of the infial purchase price represented the value of the iand. The remaing sox, has been depreciated using straight-ine depieciotion and o 39year cott recovery pertod. $25,000 in copilal expenditures has been incured since acquisition; for smplicly, however, the capital expenditures have been added to the tox basis but not separately depreciated. 12 a. Compute the annual depreciation expense. 2800007179.487 b. Compute the adjusted basis at the time of sale (after three years). 290641 c. Compute the tox liability from sale. 99959 d. Compute the after-tax cash flow (equity reversion) from sale Step by Step Solution
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