Question

The tax treatment regarding the sale of existing assets that are sold for their book value results in​ ________. A. a capital gain tax liability and recaptured depreciation taxed as ordinary income B. recaptured depreciation taxed as ordinary income C. no tax benefit or liability D. an ordinary tax benefit

Answer 1

Answer:

C) no tax benefit or liability

Explanation:

when you sell an asset, you must determine the gain or loss on the transaction and that is calculated by ⇒ sales price - book value

If both sales price and book value are the same, no gain or loss will result. You are taxed only when you have a gain, or you get a tax benefit only if you have a loss, but when the net result is 0, nothing happens.