If the tax rate is 40%, what are the net proceeds from selling an asset for...

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Question

If the tax rate is 40%, what are the net proceeds from selling an asset for $90,000? Assume the asset originally had a book value of $40,000.

Answer 1

Answer #1

Answer:

Calculation of net proceeds from selling an asset:

Net proceeds from sale = Sale proceeds - tax on gain

Tax on gain = ($90,000 - $40,000) x 0.40

= $50,000 x 0.40

= $ 20,000

Net Proceeds = $90,000 - $20,000

= $70,000 (Answer)

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Answer 2

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