Question: Firm UT sold realty to an unrelated buyer for 40 000

Firm UT sold realty to an unrelated buyer for $40,000 cash plus the buyer’s assumption of a $166,700 mortgage on the property. UT’s initial cost basis in the realty was $235,000, and accumulated tax depreciation through date of sale was $184,200.
a. Compute UT’s gain recognized on sale.
b. Assuming a 35 percent marginal tax rate, compute UT’s after-tax cash flow from the sale.



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  • CreatedNovember 03, 2015
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