A Corporation Is Selling an Existing Asset for $21,000

question 40

Multiple Choice

A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is ________.

• A) $0 tax liability
• B) $7,560 tax liability
• C) $4,400 tax liability
• D) $7,720 tax liability

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Definitions:

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A US-based program aimed at delivering all-encompassing services in early childhood education, healthcare, nutritional advice, and promoting parental involvement, all geared towards low-income families and their children.

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Bottom-up Mathematics

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