Sale Scenario Information:

NOl in Year $11($AFTER reserves$)$:

$$28,000,000$

Terminal or Exit Cap Rate:

$8\%$

Selling Costs:

$1\%$ of Gross Sales Price

Transfer Taxes $($paid to local government$)$:

$\mathrm{.}4\%(=\mathrm{.}004)$ of Gross Sales Price

Original Cost Basis $($Undepreciated$)$

$$260,000,000$

Depreciation

$$4,000,000$ per year $($each year; $10$ year period$)$

Adjusted Cost Basis $($a$/$k$/$a Adjusted Tax Basis$)$

$$220,000,000$

Outstanding Debt $($to be paid off at closing$)$

$$145,000,000$

$1.$ Using the "Sale Scenario" information above in question #$37$ and based on your answers to Question #$\text{'}$s $38-39,$ on the sale of The Westerly, what is the taxable recovery of depreciation $($based on the overall gain and the accumulated depreciation$),$ which would be taxed at $25\%?$

$$ $$40\mathrm{.}000,000$

$$ $$125,000,000$

$$ $$85,000,000$

$$ $$130,000,000$

$2.$ Using the "Sale Scenario" information above in question #$37,$ and based on your answers to Question #$\text{'}$s $38-40.$ on the sale of The Westerly, what is the taxable capital gain $($i$.$e$.$ overall taxable gain less the accrued depreciation$)?$

$$ $$125,000,000$

$$ $$85,000,000$

$$ $$40,000,000$

$$ $$130,000,000$