Yates Corporation Elects S Status, Effective for Calendar Year 2014

question 70

Multiple Choice

Yates Corporation elects S status, effective for calendar year 2014. Yates' only asset has a basis of $50,200 and a fair market value of $110,400 as of January 1, 2014. The asset is sold at the end of 2014 for $130,800. What amount must Mark Farris, a 60% owner and subject to a 15% income tax rate, pay, if any?

• A) $5,358
• B) $12,642
• C) $21,070
• D) $35,718

---

Definitions:

Libet Et Al.

Refers to a group of researchers led by Benjamin Libet who conducted experiments in the 1980s that were significant in the study of free will and consciousness, particularly focusing on the timing of conscious intentions and motor actions.

Wrist Flex

The movement of bending the wrist towards the forearm, often used in exercises aimed at strengthening the muscles that flex the wrist.

Free Will

is the concept that humans have the ability to choose and act upon their own decision making, free from certain constraints.

Conscious Decision

A deliberate choice or determination made with full awareness and intent.