Three years ago, your business bought a machine for $50,000. The machine has a 5-year MACRS...
Homework Answers
Cost of asset $50,000.00
less: 3 year Depreciation provided
50000*(20%+32%+19.2%)=
-35500
-------------------------
Book value $14,500.00
Sale value $40,000.00
Sale value is more than book value. So Capital gain = Sale Value -
book value= $25,500.00
tax on capital gain (@ 34% of 25500)=
$8,670.00
So answer is B $8670 tax owed
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