A Duplex Was Purchases for $120,000 and Depreciation of $3,300

Question

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The Answer is a)

\begin{array}{c}\begin{array}{lll} \text {Purchase price}\ \text {7 years of deprecation $ (7 \times \$ 3,300) $}\ \text {Book value}\\ \text {Net proceeds}\ \text {Book value}\ \text {Capital gain}\ \text {Capital gains tax rate}\ \text {Capital gains tax}\end{array}\begin{array}{r}\$ 120,000 \\underline{23,100 }\ \$ 96,900 \\\$ 135,000 \\underline{96,900 }\ 38,100 \15 \% \\$ 5,715\end{array}\end{array}

b)

\begin{array}{c}\begin{array}{lll}\text {Net proceeds}\\text {-Capital gains tax}\\text {Net funds from the sale}\end{array}\begin{array}{r}\$ 135,000 \\underline{ \$5, 715} \ \$ 129,285\end{array}\end{array}

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