A Hat company bought a new machine for $1,000. This equipment has a useful life of 15 years and a salvage value of $200. The company has been using the seven-year MACRS property class to depreciate the asset for tax purposes. At the end of year 5, the company sold the equipment for $800. The tax rate is 40%. What are the net proceeds (after tax) from the sale of the equipment?

A Hat company bought a new machine for $1,000. This equipment has a useful life of 15 years and a salvage value of $200. The company has been using the seven-year MACRS property class to depreciate the asset for tax purposes. At the end of year 5, the company sold the equipment for $800. The tax rate is 40%. What are the net proceeds (after tax) from the sale of the equipment?

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter12: Alternative Minimum Tax

Section: Chapter Questions

Problem 21CE

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