Alomar, a Cash Basis S Corporation in Orlando, Florida, Holds

question 31

Essay

Alomar, a cash basis S corporation in Orlando, Florida, holds the following assets and liabilities on January 1, 2016, the date the S election is made. $$\begin{array} { l r r } & \text { Adjusted Basis } & \text { Fair Market Value } \\\text { Cash } & \$ 200,000 & \$ 200,000 \\\text { Accounts receivable } & - 0 - & 105,000 \\\text { Equipment } & 110,000 & 100,000 \\\text { Land } & 1,800,000 & 2,500,000 \\\text { Accounts payable } & - 0 - & 110,000\end{array}$$ ​
During the year, Alomar collects the accounts receivable and pays the accounts payable.The land is sold for $3 million, and the taxable income for the year is $590,000.Calculate any built-in gains tax.

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Definitions:

Glorious Revolution

The peaceful overthrow of King James II of England in 1688 by a coalition of Parliamentarians and the Dutch stadtholder William III of Orange, leading to constitutional monarchy in England.

Catholic Succession

The hierarchical order and process by which authority and positions within the Catholic Church are passed from one leader to another.

English Aristocrats

Members of the highest class in certain societies, especially those holding hereditary titles or offices in England, often with significant influence over governance and culture.

Salem Witch Trials

A series of hearings and prosecutions of people accused of witchcraft in colonial Massachusetts between February 1692 and May 1693.