An S Corporation Reports a Recognized Built-In Gain of $110,000

question 122

Multiple Choice

An S corporation reports a recognized built-in gain of $110,000 and taxable income of $98,000.The company has an $8,000 NOL carryforward from a C corporation year, and a $7,000 business credit carryforward from a C corporation year.The built-in gains tax liability is:

• A)$31,500.
• B)$28,700.
• C)$24,500.
• D)$0.

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Definitions:

Enabling Conditions

Factors or circumstances that facilitate the achievement of objectives or the implementation of processes.

Real Team

A group of individuals who are deeply committed to a common purpose, goals, and working approach for which they hold themselves mutually accountable.

Clear Conduct Norms

These are well-defined guidelines or standards of behavior expected within a group, organization, or community.

Compelling Purpose

A powerful and motivating reason or mission that drives individuals or organizations to achieve specific goals.