You purchased a lift truck which cost $50,000 four years ago At that time, the truck was estimated to have a service life of eight years with a salvage value of $5,000 These estimates are still good The property has been depreciated according to a five year MACRS property class Now (at the end of y...

You purchased a lift truck which cost $50,000 four years ago. At that time, the truck was

Question:

You purchased a lift truck which cost $50,000 four years ago. At that time, the truck was estimated to have a service life of eight years with a of $5,000. These estimates are still good. The property has been depreciated according to a five-year MACRS property class. Now (at the end of year 4 from purchase), you are considering selling the truck for $20,000. What book value should be used in determining the taxable gains?
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...