{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T09:23:42-04:00", "answer_date": "2024-06-28 09:23:42", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4283060", "url": "\/study-help\/questions\/ordinary-tax-396-capital-gain-20-recap-on-4283060", "question_creation_date_js": "2024-06-28T09:23:42-04:00", "question_creation_date": "Jun 28, 2024 09:23 AM", "meta_title": "[Solved] Ordinary Tax - 39.6% Capital Gain - 20% R | SolutionInn", "meta_description": "Answer of - Ordinary Tax - 39.6% Capital Gain - 20% Recap on Depreciation - 25% Problem 1 XYZ LLC is planning to purchase land and | SolutionInn", "meta_keywords": "ordinary,tax,-,39.6%,capital,gain,20%,recap,depreciation,25%,problem,1", "question_title_h1": "Ordinary Tax - 39.6% Capital Gain - 20% Recap on Depreciation - 25% Problem 1 XYZ LLC is planning to purchase land and a commercial", "question_title": "Ordinary Tax - 39.6% Capital Gain - 20% Recap on Depreciation -", "question_title_for_js_snippet": "Ordinary Tax 39 6 Capital Gain 20 Recap on Depreciation 25 Problem 1 XYZ LLC is planning to purchase land and a commercial building for $200,000,000 An appraisal of the property has identified that 15 of the purchase price relates to land with the remaining relating to the building A Cost Segregation Study ( Cost Seg ) was performed which showed that 90 of the building cost related to real property and that 8 and 2 related to 7 and 5 year personal property respectively XYZ LLC plans to hold the property for 7 years and then sell it for $210,000,000 Calculate the after tax IRR assuming no cash flow other then tax savings from depreciation under two alternatives 1) assuming no Cost Seg data is used to calculated depreciation and 2) Cost Seg data is used Also, assume that when the personal property is sold that it will have no value Economic Gain 10 million Depreciation rates are as follows Real Property 39 year straight line 7 and 5 Year Personal Property double declining with switch to straight line or 7 Year Property 5 Year Property 1 14 29 1 20 2 24 49 2 32 3 17 49 3 19 2 4 12 49 4 11 52 5 8 93 5 11 5 6 8 92 6 5 76 7 8 93 8 4 46", "question_description": "

Ordinary Tax - 39.6%<\/span><\/p>

Capital Gain - 20%<\/span><\/p>

Recap on Depreciation - 25%<\/span><\/p>

<\/p>

Problem 1<\/u><\/strong><\/p>

<\/p>

XYZ LLC is planning to purchase land and a commercial building for $200,000,000.An appraisal of the property has identified that 15% of the purchase price relates to land with the remaining relating to the building.A Cost Segregation Study (\"Cost Seg\") was performed which showed that 90% of the building cost related to real property and that 8% and 2% related to 7 and 5 year personal property respectively. XYZ LLC plans to hold the property for 7 years<\/strong> and then sell it for $210,000,000.Calculate the after tax IRR assuming no cash flow other then tax savings from depreciation under two alternatives: 1) assuming no Cost Seg data is used to calculated depreciation and 2) Cost Seg data is used.Also, assume that when the personal property is sold that it will have no value.<\/p>

Economic Gain - 10 million<\/p>

<\/p>

Depreciation rates are as follows:<\/p>

<\/p>

Real Property - 39 year straight line<\/p>

<\/p>

7 and 5 Year Personal Property - double declining with switch to straight line or:<\/p>

<\/p>

7 Year Property<\/u>5 Year Property<\/u><\/p>

<\/p>

1.14.29%1.20%<\/p>

2.24.49%2.32%<\/p>

3.17.49%3.19.2%<\/p>

4.12.49%4.11.52%<\/p>

5.8.93%5.11.5%<\/p>

6.8.92%6.5.76%<\/p>

7.8.93<\/p>

8.4.46<\/p>", "transcribed_text": "", "related_book": { "title": "Core Macroeconomics", "isbn": "978-1429278478, 1429278471, 978-1429278492, 1429278498, 1464191433, 978-1464191435", "edition": "3rd edition", "authors": "Eric Chiang", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/648.jpg", "uri": "\/textbooks\/core-macroeconomics-3rd-edition-648", "see_more_uri": "" }, "free_related_book": { "isbn": "B095TJH5Z9", "uri": "\/textbooks\/start-pentesting-now-a-guide-to-ethical-hacking-tools-and-techniques-1st-edition-979-8726623207-306808", "name": "Start Pentesting Now A Guide To Ethical Hacking Tools And Techniques", "edition": "1st Edition" }, "question_posted": "2024-06-28 09:23:42", "see_more_questions_link": "\/study-help\/questions\/business-general-management-2023-February-20", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/check-the-websites-of-the-consulting-companies-listed-in-the", "description": "Check the websites of the consulting companies listed in the chapter. Which ones impressed you most as a potential client and as a potential employee? Boston Consulting Group (www.bcg.com) Deloitte...", "stars": 3 }, { "url": "\/study-help\/psychology\/compensatory-equalization-of-treatments-were-extra-resources-given-to-the-1980083", "description": "Compensatory equalization of treatments: Were extra resources given to the control group?", "stars": 3 }, { "url": "\/the-accounting-records-of-route-maker-wireless-include-the-following-241797", "description": "The accounting records of Route Maker Wireless include the following as of December 31, 2014: Requirements 1. Report these liabilities on the Route Maker Wireless balance sheet, including headings...", "stars": 3 }, { "url": "\/study-help\/questions\/on-october-1-2021-grouper-corp-issued-792000-5-10year-9890486", "description": "On October 1, 2021, Grouper Corp. issued $792,000, 5%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared...", "stars": 3 }, { "url": "\/study-help\/questions\/assume-gillette-corporation-will-pay-an-annual-dividend-of-1716879", "description": ". Assume Gillette Corporation will pay an annual dividend of $0.54 one year from now. Analysts expect this dividend to gm at 11.1% per year thereafter until the fourth year. Thereafter. growth wi...", "stars": 3 }, { "url": "\/study-help\/questions\/your-supplier-notices-that-you-firm-has-been-stretching-its-5736756", "description": "(1) Suppose your supplier offered you credit terms of 1.5\/10 net 40 days. Your firm is not taking discounts, but is paying after 35 days instead of waiting until Day 40. What is the effective annual...", "stars": 3 }, { "url": "\/study-help\/questions\/compare-the-differences-in-terminology-encountered-when-creating-a-linux-881208", "description": "Compare the differences in terminology encountered when creating a Linux server on each cloud provide?", "stars": 3 }, { "url": "\/study-help\/questions\/1-create-a-taccount-ledger-for-the-following-balances-open-5701061", "description": "1. Create a T-Account ledger for the following Balances, open the T-accounts with the balances from the Balance Sheet. 2. Input the transactions into each account on the T-Accounts page. There is no...", "stars": 3 }, { "url": "\/study-help\/questions\/which-decision-can-be-made-with-managerial-accounting-information-deciding-1335804", "description": "Which decision can be made with managerial accounting information? Deciding whether or not the company can repay its debts Deciding whether or not the company is providing useful products Deciding...", "stars": 3 }, { "url": "\/study-help\/questions\/the-cash-accounts-of-ria-on-december-312021-has-balance-5622488", "description": "\"The cash accounts of Ria on December 31,2021 has balance of P151,000 and it consist of the following: Bills and coins on hand P52,780 Traveler's check 22,400 Credit memo from supplier's for purchase...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/15before-year-end-adjusting-entries-accounts-receivable-had-a-215000-4283059", "next": "\/study-help\/questions\/cullumber-corporation-began-2017-with-a-83900-balance-in-the-4283061" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Ordinary Tax - 39.6% Capital Gain - 20% Recap on Depreciation -", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/ordinary-tax-396-capital-gain-20-recap-on-4283060" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } } }