SEC Corporation Has Been Operating as a C Corporation Since

question 10

Essay

SEC Corporation has been operating as a C corporation since 2011. It elected to become an S corporation, effective January 1, 2014. On December 31, 2013, SEC reported a net unrealized built in gain of $10,000. In addition to other transactions in 2014, SEC sold inventory it owned at the beginning of 2014 (it did not sell any other assets it owned at the beginning of 2013). At the beginning of the year, the inventory it sold had a fair market value of $40,000 and a FIFO tax basis of $15,000. SEC sold the inventory for $28,000. If SEC had been a C corporation in 2013, its taxable income would have been $40,000. How much built-in gains tax must SEC pay in 2014?

Identify the legal duties and liabilities of principals and agents.

Understand the legal frameworks governing employee rights and employer responsibilities.

Recognize the significance of legislative measures such as the Family and Medical Leave Act (FMLA), Fair Labor Standards Act of 1938, and workers' compensation laws.

Distinguish between different types of employment discrimination and harassment.

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Definitions:

Accepts Credit Cards

This term indicates a business's or entity's capability to process transactions using credit cards as a form of payment.

Form of Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount to improve cash flow.

Securitizations

The process of pooling various types of contractual debt such as mortgages or loans and selling their related cash flows to third party investors as securities.

Consolidate

The process of combining financial statements from different entities within a group to produce a single set of financial statements.