Apple, Inc., a cash basis S corporation, transitioned from a C corporation and has specific assets and liabilities as of January 1, 2010. During the year, it collects accounts receivable, pays accounts payable, and sells land for $3 million, reporting taxable income of $590,000. The document asks for the calculation of Apple's built-in gains tax.

1. 10.
(TCOs 1 and 10) Apple, Inc. a cash basis S corporation in
Orange, Texas, formerly was a C corporation. Apple has the
following assets and liabilities on January 1, 2010, the date the
S election is made:
Adjusted Basis
Fair Market Value
Cash
$200,000
$200,000
Accounts receivable
-0-
$105,000
Equipment
$110,000
$100,000
Land
$1,800,000
$2,500,000
Accounts payable
-0-
$110,000
During 2010, Apple collects the accounts receivable and pays
the accounts payable. The land is sold for $3 million, and
taxable income for the year is $590,000. What is Apple's built-
in gains tax?
(Points : 5)