Determine pros and cons of investing into this property based on these values, also if possible, determine
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Determine pros and cons of investing into this property based on these values, also if possible, determine COC (cash on cash) return
Ordinary income tax rate | 22% |
Capital gains tax rate | 15% |
Depreciation Recapture Tax Rate | 25% |
NOI | $20,795.76 |
CAPEX | -$1,890.52 |
Acquisition price | $510,000 |
Percentage of property attributable to the building | 80% |
Depreciable basis | $408,000 |
Depreciable term | 27.5 |
Yearly depreciation | -$14,836 |
Amortized financing cost | -$255 |
Remaining financing cost at time of sale | -$7,395 |
Holding period | 3 years |
Going out cap rate or growth rate | 2.95% |
Selling expenses | -$22,654 |
Net Selling Price (NSP) | $543,696 |
Remaining Mortgage Balance (RMB) | -$382,500 |
Before Tax Equity Reversion | $161,196 |
Capital gains | $149,461 |
Capital gains tax | $22,419 |
Depreciation recapture amount | -$44,509 |
Depreciation recapture tax | -$6,676.35 |
Taxes on Sale | -$15,743 |
Sum of discounted cash flows | $75,613 |
Equity needed | -$135,150 |
NPV (future discounted cash flows and day 1 costs): | -$59,537 |
After Tax IRR | -61% |
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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