Ten years ago you purchased a small apartment complex for $900,000. You borrowed $700,000 at 5 percent for 25 years with

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Ten years ago you purchased a small apartment complex for
$900,000. You borrowed $700,000 at 5 percent for 25 years with
monthly payments. The original depreciable basis was $750,000 and
you have used 27½-year straight-line depreciation over the
five-year holding period. Assume there was no personal property
associated with the acquisition. Assume no capital expenditures
have been made since acquisition. Assume 6 percent selling costs,
33 percent ordinary income tax rate, a 15 percent capital gains tax
rate, and a 25 percent recapture rate. Ignore the mid-month
convention. If you sell the property today for $1,250,000 in a
fully-taxable sale what will be the after-tax equity reversion
(cash flow) from the sale (rounded to $Thousands)?
a)
$586,000
b)
$559,000
c)
$530,000
d)
$517,000
e)
$670,000
f)
$627,000