What will be the taxes on the sale

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Five years ago, you purchased a small apartment complex for $1M. You borrowed 700k at 12% for 25 years with annual payments. The original depreciable basis was $750k and you have used 27.5 year straight line depreciation over the 5 year holding period. Assume no capital expenditures have been made since acquisition. If you sell the property today for $1,270,000 in a fully taxable sale, what will be the taxes on the sale? Assume 6% selling cost, 33% ordinary income tax rate, 15% capital gains tax rate, and a 25% recapture rate.

Reference no: EM131525234

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