17 August, 05:06

# Aneta sold an apartment building for \$713,470 in 2019. She purchased the building in 2013 for \$600,000 and has taken \$151,806 in depreciation on the building. Assuming Aneta is married with regular taxable income of \$500,000 and in the 35% tax bracket, how is her gain taxed?a. \$113,470 at 0% and \$151,806 at 28%.b. \$113,470 at 25% and \$151,806 at 15%.c. \$151,806 at 28% and \$113,470 at 15%.d. \$151,806 at 25% and \$113,470 at 15%.

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1. 17 August, 05:15
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(d). 151,806 at 25% and \$113,470 at 15%

Explanation:

Book Value of apartment building = Cost of acquisition less accumulated depreciation claimed till date by the assessee

Cost Of Acquisition \$600,000

Less: Depreciation till date (\$151,806)

Book Value in 2019 448,194

Calculation of Long Term Capital Gain:

Sales Consideration \$713,470

Less: Book value on date of sale (\$448,194)

Long Term Capital Gain \$265,276

The break up of above long term capital gain taxation would be as follows

\$113470 at 15%

\$ 151806 at 25%