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Book value and taxes on sale of assets  Troy Industries purchased a new machine 3 ​year(s)...

Book value and taxes on sale of assets  Troy Industries purchased a new machine 3 ​year(s) ago for $82,000. It is being depreciated under MACRS with a​ 5-year recovery period using the schedule based on table below. Assume 40% ordinary and capital gains tax rates.

a. What is the book value of the​ machine?

b. Calculate the​ firm's tax liability if it sold the machine for each of the following​ amounts: $98,400​; $57,400​; $23,780​; and $16,600.

Rounded Depreciation Percentages by Recovery Year Using MACRS for
First Four Property Classes              
   Percentage by recovery year*          
Recovery year    3 years    5 years    7 years    10 years
1 33% 20% 14% 10%
2 45% 32% 25% 18%
3 15% 19% 18% 14%
4 7% 12% 12% 12%
5 12% 9% 9%
6 5% 9% 8%
7 9% 7%
8 4% 6%
9 6%
10 6%
11 4%
Totals 100% 100% 100% 100%

a. The remaining book value is $____

       

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jeff jeffy answered 1 year ago
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