please show your work Threeyear property class type equipmen

please show your work

Three-year property class type equipment bought for $30,000 is being disposed of for $20,000 at the end of three years. The company is at a 34% tax bracket. How much profit did the company make on the equipment? Select one: a. $16,500 b. Lost money c. $17,777 d. $2,223

Based on MACRS 3-Year Depreciation Schedule as caluclated above, book value at the end of three years = $2,223

So Capital gain = $20,000 - $2,223 = $17,777

However, they will be Capital gain taxes = (0.34) $17,777 = $6,044.18

MACRS 3-Year Depreciation Schedule

Year	Adjusted Basis	Rate %	Depreciation	Cumulative	Book Value
1	30,000	33.33	10,000	10,000	20,000
2	20,000	44.44	13,333	23,333	6,667
3	6,667	14.81	4,443	27,777	2,223

please show your work Three-year property class type equipment bought for $30,000 is being disposed of for $20,000 at the end of three years. The company is at

please show your work Threeyear property class type equipmen

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