Problem NO: 35

Tempe Corporation is a calendar-year corporation.  At the beginning of 2024, its election to be taxed as an S corporation became effective.  Tempe Cor

Tempe Corporation is a calendar-year corporation.  At the beginning of 2024, its election to be taxed as an S corporation became effective.  Tempe Corp.’s balance sheet at the end of 2023 reflected the following assets (it did not have any earnings and profits from its prior years as a C corporation):

\r\n

Asset Adjusted basis FMV

\r\n

Cash $20,000 $20,000

\r\n

Accounts receivable 40,000 40,000

\r\n

Inventory 160,000 200,000

\r\n

Land 150,000 120,000

\r\n

  Totals $370,000 $380,000

\r\n

Tempe Corp.’s business income for the year was $40,000 (this would have been its taxable income if it were a C corporation).  During 2024, Tempe Corp. sold all of the inventory it owned at the beginning of the year for $210,000.  

\r\n

a. What is its built-in gains tax in 2024?

\r\n

 

0  reviews

Suggestions based on the Question and Answer that you are currently viewing

The benefits of buying with AnswerDone:

Guaranteed quality through customer reviews

Access to High-Quality Documents

Our platform features a wide range of meticulously curated documents, from solved assignments and research papers to detailed study guides. Each document is reviewed to ensure it meets our high standards, giving you access to reliable and high-quality resources.

Quick and easy check-out

Easy and Secure Transactions

We prioritize your security. Our platform uses advanced encryption technology to protect your personal and financial information. Buying with AnswerDone means you can make transactions with confidence, knowing that your data is secure

Focus on what matters

Instant Access

Once you make a purchase, you’ll have immediate access to your documents. No waiting periods or delays—just instant delivery of the resources you need to succeed.

$1.49  0x  sold
    (0)
  Add to cart