Crew Corporation Elects S Status Effective for Tax Year 2008

question 158

Essay

Crew Corporation elects S status effective for tax year 2008. As of January 1,2008,Crew's assets were appraised as follows.

In each of the following situations,calculate any built-in gains tax,assuming that the highest corporate tax rate is 35%. C corporation taxable income would have been $100,000.
a.During 2008, Crew collects $40,000 of the accounts receivable and sells 80% of the inventory for $99,000.
b.In 2009, Crew sells the land held for investment for $203,000.
c.In 2010, the building is sold for $270,000.

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