Yates Corporation Elects S Status,effective for Current Calendar Tax Year

question 71

Multiple Choice

Yates Corporation elects S status,effective for current calendar tax year.Yates' only asset has a basis of $50,200 and a fair market value of $110,400 as of January 1.The asset is sold at the end of the year 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:

Diathesis-stress

A psychological theory that explains disorder as the result of an interaction between a pre-dispositional vulnerability and stress caused by life experiences.

Expressed Emotion

A measure of the family environment that is based on how much criticism, hostility, and emotional overinvolvement are used when talking about the patient.

Serotonin

A neurotransmitter that plays a key role in mood regulation, digestion, sleep, and other bodily functions.

Conflict

A situation or condition in which a person encounters opposition, disagreement, or incompatibility, leading to a state of stress or tension.