１０萬＊２０％＝２萬，剩下三萬是ｄｅｐ ｒｅｃａｐｔｕｒｅ．

We don't know his depreciation basis, I am assuming he never claimed depreciation in the past 10 years, nevertheless, he still need to pay depreciation recapture.  Assuming his income tax rate is 22%

(($420000/27.5)*10)*22% = 33600, there is the 3萬。

Of course, his depreciation basis should not be 42萬，But I suspect as a tax novice he thought depreciation basis = purchase price.  In fact it is only the purchase price for the structure, not land. 

So in fact the recapture should be a fraction of 3萬，I am not sure what land/structure value ratio in NJ is, if it's 1:1, then the recapture should be 1.5 (half).