Hart, an individual, bought an asset for $500,000 and has claimed $100,000 of depreciation deductions against the asset. hart has a marginal tax rate of 32 percent. what is the amount and character of hart's recognized gain or loss if the asset is tangible personal property sold for $550,000?

Gain of $150,000.

Explanation:

The recognized gain/loss of an asset is calculated as below:

Recognized gain/loss of a liquidated asset = Sales price - Net book value of a liquidated asset

= Sales price - (Original purchase cost of a liquidated asset - Accumulated depreciation)

Putting all the number, we get:

Recognized gain/loss of Hart's asset = 550,000 - (500,000 - 100,000) = $150,000

Note: tax rate is only relevant when the question is about calculated casfh inflow from liquidating an asset. If that is the case, we take sale price , then subtracted by the tax on gain/loss.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

it should be