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19 January, 01:10

A piece of property bought by XYZ Corporation a few years ago was sold for $5 M. The cost basis for this property was $2.75 M. The company had a taxable income of $12.15 million in the year the property was sold. The capital gain tax on this property is $337,500.

O True

O False

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Answers (1)
  1. 19 January, 03:20
    0
    True

    Explanation:

    Data given in the question

    Sale value of the property = $5,000,000

    Cost basis of property = $2,750,000

    And, the taxable income is $12,150,000

    So, based on the above information, the capital gain on the property is

    = (Sale value of the property - Cost basis of property) * capital gain tax rate

    = ($5,000,000 - $2,750,000) * 15%

    = $337,500

    We assume the capital gain tax rate is 15%

    Hence, the given statement is true
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