Question

If a property had a net income of $550,000 interest payments of $100,900 and an annual recovery of $150,000 with a tax rate of 35% the properties annual tax liability is?

Answer 1

To determine the annual tax liability, subtract the interest payments and annual recovery from the net income. Multiply the resulting taxable income by the tax rate.

Step-by-step explanation:

To calculate the property's annual tax liability, we need to determine the taxable income and apply the appropriate tax rate. To do this, we subtract the interest payments and annual recovery (which is a form of income) from the net income. In this case, the taxable income is $550,000 - $100,900 - $150,000 = $299,100.

Next, we multiply the taxable income by the tax rate of 35% to find the annual tax liability. The calculation is $299,100 * 35% = $104,685.