Several years ago, Geneva purchased an office building for $1,000,000. She sold the building this year...
Several years ago, Geneva purchased an office building for $1,000,000. She sold the building this year for $1,250,000. Accumulated depreciation on the building totaled $965,000 at the date of sale. Assume Geneva’s total income is such that her long-term capital gains rate is 20%. How much tax will she owe in connection with sale of the building?
Homework Answers
Ans $ 243000
Profit on Sale = Sales Value - Written down value
= 1250000 - ( purchase cost - accumulated depreciation)
= 1250000 - (1000000 - 965000)
= 1215000
Tax on Profit = 1215000 * 20%
= $ 243000
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