Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
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)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems

Authors: Marshall B. Romney

8th Edition

0201357216, 9780201357219

More Books

Students also viewed these Accounting questions