During 2016, MVC Operated as a C Corporation

question 6

Essay

During 2016, MVC operated as a C corporation. However, it made an election to be taxed as an S corporation effective January 1, 2017. MVC uses the accrual method of accounting and uses the LIFO method of accounting for its inventory. At the end of 2016 its inventory basis under the LIFO method was $63,000. If MVC had used the FIFO method of accounting for its inventory, it would had a $70,000 basis in its inventory. Finally, MVC's regular taxable income in 2016 was $80,000. What amount of LIFO recapture tax must MVC pay? When must it pay the tax?

---

Definitions:

Dissociative Disorders

A category of mental health disorders characterized by a disconnection and lack of continuity between thoughts, memories, surroundings, actions, and identity.

Almost Meets

A performance category indicating that an individual or entity is approaching the expected standards or criteria, but has not fully achieved them yet.

Criteria

Standards or principles on which judgments or decisions are based.