calculate the total tax payable in this situation:\n\n- purchase price of the immovable (land and building)…

calculate the total tax payable in this situation:\n\n- purchase price of the immovable (land and building): $600,000\n- breakdown of land value upon purchase: 32%\n- immovable resale price (land and building): $950,000\n- ucc: $350,000\n- breakdown of land value upon resale 29%\n- tax rate: 47%

calculate the total tax payable in this situation:\n\n- purchase price of the immovable (land and building): $600,000\n- breakdown of land value upon purchase: 32%\n- immovable resale price (land and building): $950,000\n- ucc: $350,000\n- breakdown of land value upon resale 29%\n- tax rate: 47%

Answer

Explanation:

Step1: Calculate the purchase - land value

The purchase price of the immovable is $600,000 and the land value upon purchase is 32% of it. So the purchase - land value $V_{l1}=600000\times0.32 = 192000$.

Step2: Calculate the purchase - building value

The purchase - building value $V_{b1}=600000 - 192000=408000$.

Step3: Calculate the resale - land value

The resale price of the immovable is $950,000 and the land value upon resale is 29% of it. So the resale - land value $V_{l2}=950000\times0.29 = 275500$.

Step4: Calculate the resale - building value

The resale - building value $V_{b2}=950000 - 275500 = 674500$.

Step5: Calculate the capital gain on the building

The undepreciated capital cost (UCC) is $350,000. The capital gain on the building $CG_{b}=V_{b2}-350000=674500 - 350000=324500$.

Step6: Calculate the total tax payable

The tax rate is 47%. The total tax payable $T = 324500\times0.47=152515$.

Answer:

$152515$