An S Corporation Reports a Recognized Built-In Gain of $110,000

question 126

Multiple Choice

An S corporation reports a recognized built-in gain of $110,000 and taxable income of $98,000.The company carries an $8,000 NOL carryforward from a C corporation year,and a $7,000 business credit carryforward from a C corporation year.The built-in gains tax liability is:

• A)$31,500.
• B)$28,700.
• C)$24,500.
• D)$0.
• E)Some other amount.

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Definitions:

Mail Merge

A software function that automatically inserts personal and unique data from a database into template documents, such as letters or email messages.

Graphics Software

Computer programs designed to facilitate the creation, editing, and manipulation of images, animations, and diagrams.

Word Processor

A digital tool or software application used for the creation, editing, formatting, and printing of text documents.

Spreadsheet App

Software that allows users to organize, analyze, and store data in tables, and supports complex calculations, graphical displays, and data management.