Ten years ago you purchased a small apartment complex for $900,000. You borrowed $700,000 at 5 percent for 25 years with monthly payments. The original depreciable basis was $750,000 and you have used 27-year straight-line depreciation over the five-year holding period. Assume there was no personal property associated with the acquisition. Assume no capital expenditures have been made since acquisition. Assume 6 percent selling costs, 33 percent ordinary income tax rate, a 15 percent capital gains tax rate, and a 25 percent recapture rate. Ignore the mid-month convention. If you sell the property today for $1,250,000 in a fully-taxable sale what will be the after-tax equity reversion (cash flow) from the sale (rounded to $Thousands)?

a)

$586,000

b)

$559,000

c)

$530,000

d)

$517,000

e)

$670,000

f)

$627,000