Quadrant,Inc

question 21

Multiple Choice

Quadrant,Inc. ,is a former C corporation whose first S corporation year began on January 1,2010.At that time,Quadrant had two assets: X,with a value of $1,000 and a basis of $400;and Y,with a value of $400 and a basis of $600.The net unrealized built-in gain as of January 1,2010,is $400 (i.e. ,X's $600 gain less Y's $200 loss) .Asset X is sold for $1,200 during 2010,and asset Y is retained.The recognized built-in gain in 2010 is:

• A)$0.
• B)$200.
• C)$400.
• D)$600.
• E)None of the above.

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Definitions:

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Gu Kaizhi

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