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)
.
10. (TCOs 1 and 10) Apple, Inc. a cash basis S corporation in Or.docx
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)
