Since the beginning of the fiscal year 2009, Texas Department of Transportation invest one million each year to build up the transportation management database system in one of the Southern Texas city regions. TxDot is planning to transfer this database system to the city authority by the end of the fiscal year 2020. If the rate of return is 12% per year during the investment period, what is the total value of this database system when transferring?

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.