Equipment that was purchased for $900,000 has a current book value of $450,000. Assume a capital gains tax rate of 28%. Compute the net tax payment or savings if you sell the eq…

Question

asked Dec 22, 2021 47.6k views

1 Answer

Yasan Glass · Answer 1 · 2021-12-28T12:49:42+0000

Answer: Savings on taxes of -$50,008‬

Step-by-step explanation:

Book Value = $450,000

Selling Price = $271,400

Book Value is more than selling price so there is a Capital loss.

Capital gains tax will therefore become a tax saving of;

= 28% * (271,400 - 450,000)

= ‭-$50,008‬