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After-Tax Net Cash Proceeds of Resale
The After-Tax Net Cash Proceeds of Resale (ATNCPR) is the after-tax
reversion to equity; generally, the estimated resale price of the property
less commissions, outstanding debt and any tax claim.
The After-Tax Net Cash Proceeds can be found using the HP-12C
program which follows. In calculating the owner's income tax liability on
resale, this program assumes that the owner elects to have his capital
gain taxed at 40% of his Marginal Tax Rate. This assumption is in
accordance with a 1978 Federal tax ruling.* (*Federal Taxes, code sec.
1202 (32,036))
This program uses declining balance depreciation to find the amount of
depreciation from purchase to sale. This amount is used to determine the
excess depreciation (which is equal to the amount of actual depreciation
minus the amount of the straight line depreciation).
25
175200 2
40296 3
40,296.00 1st year operating cost.
1200000 4
1,200,000.00 Depreciable value.
35 5
35.00 Depreciable life.
50 7
50.00 Marginal tax rate.
3.5 8
3.50 Potential Gross Income
1.6 9
1.60 Operating cost growth rate.
7 0
7.00 Vacancy rate.
31
7.00 Go to dep. step.
32- 42
23
Change to SL.
1.00
18,021.07
Year 1
ATCF
1
2.00
20,014.26
Year 2
ATCF
2
3.00
22,048.90
Year 3
ATCF
3
4.00
24,123.14
Year 4
ATCF
4
5.00
26,234.69
Year 5
ATCF
5