Question

Rayna bought an apartment building in july 2016 for $360,000 and sold it for $480,000 in 2022there was $77.994 o accumulated depreciation allowed on the apartment buildingif rayna is in the 35% tax bracket, how much of the gain taxed at 25

A) $120,000
B) $144,000
C) $96,000
D) $80,000

Answer 1

To calculate the gain taxed at 25%, subtract the cost basis from the selling price and multiply the gain by the tax rate. The correct answer is option D) $80,000.

Step-by-step explanation:

To calculate the gain taxed at 25%, we first need to determine the cost basis of the apartment building. The cost basis is the original purchase price minus the accumulated depreciation. In this case, the cost basis is

$360,000 - $77,994 = $282,006.

Next, we calculate the gain by subtracting the cost basis from the selling price.

The gain is $480,000 - $282,006 = $197,994.

Now, we can calculate the amount of the gain that is taxed at 25% by multiplying the gain by the tax rate. The amount is $197,994 * 0.25 = $49,498.50.

Therefore, the correct answer is $49,498.50, which is closest to option D) $80,000.