During 2019, MVC Operated as a C Corporation

question 69

Essay

During 2019, MVC operated as a C corporation.However, it made an election to be taxed as an S corporation effective January 1, 2020.MVC uses the accrual method of accounting and uses the LIFO method of accounting for its inventory.At the end of 2019 its inventory basis under the LIFO method was $80,000.If MVC had used the FIFO method of accounting for its inventory, it would have had a $100,000 basis in its inventory.Finally, MVC's regular taxable income in 2019 was $5,000.What amount of LIFO recapture tax must MVC pay? When must it pay the tax?

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Definitions:

Psychodynamic Therapy

A type of therapy based on the psychoanalytic perspective, focusing on unconscious processes as they are manifested in a person's present behavior, with an emphasis on emotional and relationship issues.

Unipolar Depression

A major depressive disorder characterized by a persistent feeling of sadness or lack of interest in external stimuli, without the manic episodes associated with bipolar disorder.

Psychotherapies

A variety of therapeutic techniques utilized to improve an individual's mental health and alleviate psychological disorders by speaking with a therapist.

Bipolar II Disorder

A type of bipolar disorder marked by mild manic (hypomanic) and major depressive episodes.