SEC Corporation Has Been Operating as a C Corporation Since

question 141

Essay

SEC Corporation has been operating as a C corporation since 2017. It elected to become an S corporation, effective January 1, 2020. On December 31, 2019, SEC reported a net unrealized built-in gain of $21,000. In addition to other transactions in 2020, SEC sold inventory it owned at the beginning of 2020 (it did not sell any other assets it owned at the beginning of 2020). At the beginning of the year, the inventory it sold had a fair market value of $51,000 and a FIFO tax basis of $37,000. SEC sold the inventory for $39,000. If SEC had been a C corporation in 2020, its taxable income would have been $56,500. How much built-in gains tax must SEC pay in 2020? Assume the corporate tax rate is 21%.

Grasp the concept and importance of search engine marketing and optimization.

Recognize the role and impact of customer brand engagement and expectations in marketing strategies.

Understand the concepts and types of memory, including prospective and retrospective memory.

Identify various theories of forgetting, such as decay theory and interference theory.

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Definitions:

Thermodynamics

The branch of physics that deals with the relationships between heat and other forms of energy, and how energy affects matter.

Redox Reactions

Chemical reactions involving the transfer of electrons from one substance to another, affecting the oxidation state of atoms.

Chloroplasts

Organelles found in plant cells and eukaryotic algae that conduct photosynthesis, converting light energy into sugars while producing oxygen.

Mitochondria

Cellular organelles responsible for producing energy through the process of oxidative phosphorylation.