A Cash Basis Calendar Year C Corporation Reports $100,000 of Accounts

question 42

Multiple Choice

A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to an S corporation on February 14.By the end of the year, $60,000 of these receivables are collected.Calculate any built-in gains tax, assuming that there is sufficient taxable income.

• A)$0.
• B)$10,000.
• C)$21,000.
• D)$35,000.

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Definitions:

Federal Government

The national government of a federal state, which shares power with subnational entities such as states or provinces.

Civil Rights Act

Legislation passed in the United States, notably in 1964, aimed at ending discrimination based on race, color, religion, sex, or national origin, and promoting equal opportunity.

U.S. Commission on Civil Rights

An independent, bipartisan agency established by the United States federal government in 1957 to investigate, report on, and address civil rights issues in the U.S.

Literacy Tests

Measures used historically in the United States to disenfranchise voters, particularly African Americans, by requiring them to pass reading and writing tests.