The company YYY is selling its classic car in mint condition for $220,000 at a public auction. The car was originally bought for $45,000 and it has been always kept in the inventory for the last 40 years. It is depreciated on the books from its original purchase price at a CCA rate of 30%. The company’s marginal tax rate is 28%. Is the company eligible to receive tax credit (how much?) or does it have tax liability (how much)? Why? What is the net salvage value of the car?

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Tax Implications for YYY Selling the Classic Car Tax Liability The company will likely have a tax li... View the full answer