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What is the amount of depreciation recapture tax and capital

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Problem 1: After owning a multifamily residential property for 5 years "A" sold the property for $250 million. "A" had purchased the property for $137.5 million. During their holding period, "A" did not invest any additional capital to improve the property. What is the amount of depreciation recapture tax and capital gains tax that "A" will have to pay upon the sale of the property? Ignore transaction costs. The depreciation recapture tax rate is 25% and the capital gains tax rate is 20%.

(a) $6.25 million

(b) $22.50 million

(c) $28.75 million

(d) $25.00 million

Reference no: EM132936861

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