The Recognition Period for the Built-In Gains Tax Extends for How

question 57

Multiple Choice

The recognition period for the built-in gains tax extends for how many years after the S election takes effect?

• A)one year
• B)three years
• C)five years
• D)ten years

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Definitions:

Inventory Turnover

Inventory turnover is a ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Return on Equity

A measure of the profitability of a business in relation to the equity, calculated as net income divided by shareholders' equity, expressing the company's ability to generate profits from its shareholders' investments.

Net Profit Margin

It is a financial metric that indicates how efficient a company is at generating profit compared to its revenue, expressed as a percentage.

Gross Profit Margin

The difference between sales and the cost of goods sold, expressed as a percentage of sales, indicating the efficiency of a company in managing its production and labor costs.