To calculate the taxes due on a sale, apply the 6 percent selling costs, 25 percent recapture rate if applicable, 15 percent capital gains tax on any profit, and 33 percent ordinary tax rate on additional profit. Calculation requires the sale price and related figures, which are not provided in the question.
To determine the taxes due on a sale, you need to understand different tax rates and how they apply to the situation. The question specifies several rates, including ordinary income tax, capital gains tax, and recapture rate as well as selling costs. In this scenario, we are not given a specific sale price or profit to calculate the exact taxes, but we can outline the general process of such a calculation by applying the given tax rates.
First, you would calculate the selling costs which are 6 percent of the sale price and subtract this from the sale price to find the net amount. Then you should calculate any potential recapture tax if applicable, such as depreciation recapture at 25 percent, which would be on the recaptured depreciation amount. After this, you would calculate the capital gains tax which would be 15 percent on the capital gains portion (difference between adjusted cost basis and the net sale price after selling costs). If there were any remaining profit taxed at ordinary income rates, it would be taxed at the 33 percent rate specified.