SEC Corporation Has Been Operating as a C Corporation Since

question 96

Essay

SEC Corporation has been operating as a C corporation since 2015. It elected to become an S corporation, effective January 1, 2018. On December 31, 2017, SEC reported a net unrealized built in gain of $60,000. In addition to other transactions in 2018, SEC sold inventory it owned at the beginning of 2018 (it did not sell any other assets it owned at the beginning of 2018). At the beginning of the year, the inventory it sold had a fair market value of $30,000 and a FIFO tax basis of $10,000. SEC sold the inventory for $35,000. If SEC had been a C corporation in 2018, its taxable income would have been $100,000. How much built-in gains tax must SEC pay in 2018?

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Definitions:

Mainstream Medicine

Conventional medical practices and treatments that are widely accepted and practiced by the general medical community.

Scientifically Validated

Methods, procedures, or practices that have been tested through rigorous scientific research and have been proven effective or reliable.

Social Support

The help and comfort received from friends, family, and others, which can be crucial for mental health and overcoming stressful situations.

Cardiovascular Health

Refers to the health of the heart and blood vessels, often associated with reducing risks of heart disease and stroke.