Question: [The information presented here applies to questions 5 -- 8] You acquire a small office building for $6M. (5) If the land value is assessed

[The information presented here applies to questions 5 -- 8] You acquire a small office building for $6M.

(5) If the land value is assessed at $1,515,000, what is the annual value of the depreciation allowance?

(6) Assuming that you have made no capital improvements on the building, what is the book value of the property after five years?

(7) What is the taxable capital gain if you sell the building for $7.75M after five years?

(8) What is the capital gains tax due if the tax on capital appreciation is 20% and the depreciation recapture tax is 25%?

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