King Corporation, a Cash Method Taxpayer That Uses the Calendar

question 37

Multiple Choice

King Corporation, a cash method taxpayer that uses the calendar year as its tax year, was incorporated on June 1, 1984. The corporation made its initial S election on December 1 of last year, effective for the current tax year. Earnings and profits of $60,000 have been retained from C corporation tax years. Which one of the following events results in the recognition of a built-in gain?

• A)collection of accounts receivable in the current year that resulted from services performed last year
• B)collection of interest income earned in the current year on bonds purchased on January 1 of last year
• C)collection of dividends declared on April 5 of the current year on stock purchased on February 14 of the current year
• D)None of the above are built-in gains.

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Definitions:

Organizational Behavior

The study of individual and group dynamics within organizational settings, focusing on how people interact and behave in work environments.

Personality Traits

Characteristics and qualities that form an individual's distinctive character and behavioral patterns.

Big Five Personality Dimension

A model that describes human personality through five broad dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Conscientiousness

A characteristic of personality marked by being well-organized, reliable, and having a profound commitment to responsibilities.