Income before Mr. Smith‘s Death Income after Mr. Smith‘s Death

$3,000.00 – Rental Income $3,000.00 – Rental Income

+$3,000.00 – Pension -$1,000.00 – Management Fee

+$1,000.00 – Social Security -$1,000.00 – Repairs

=$7,000.00 – Monthly Income =$1,000.00 – Net Rental Income

+$1,000.00 – Social Security

=$2,000.00 – Monthly Income

Income if Apartment Building is Sold

$1,000,000.00 – Proceeds

-$ 144,000.00 – Capital Gain @ 15%+9%X $600,000.00 tax

-$ 102,000.00 – Depreciated Recapture @ 25%+9%X $300,000.00 tax

=$ 754,000.00 – After Tax Proceeds X 5% Interest

=$ 37,000.00 (divided by 12 months) = $3,140.00+$1,000.00 Social Security

=$ 4,140.00 – Monthly Income

Donation of Apartment Building to MHCC as Gift Annuity

$1,000,000.00 – Proceeds

– Zero Taxes

=$1,000,000.00 – After Tax Proceeds X 6.5%

=$ 65,000.00 – Divided by 12 months

=$ 5,417.00 – Month

+$ 1,000.00 – Social Security

=$ 6,417.00 – Monthly Income

– $ 1,600.00 – Insurance Premium

– $ 4,817.00 – Disposable Income

Income before Mr. Gate’s Death

$7,000.00

Income after Mr. Gate’s Death

$2,000.00

Income if Apartment sold

$4,140.00

Income Disposable income, after insurance premiums, if donated to MHCC

$4,817.00