Exam 21: a Comprehensive Analysis for Real Estate Investment Decisions

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An apartment complex has net operating income of $15,000,depreciation of $8,000,and interest expense of $13,000.The tax rate is 30%. a)What is taxable income or loss? b)What is the tax shield benefit or tax owed?

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a)($6,000);b)$1,800

A duplex was purchased for $120,000,and depreciation of $3,300 has been taken for the last seven years.The net proceeds from the sale of the property were $135,000. a)Assuming the property qualifies for capital gains treatment at a 15% rate,what is the tax owed? b)What are the net funds from the sale?

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a)$5,715;b)$129,285

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