Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed asan S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected thefollowing assets (it did not have any earnings and profits from its prior years as a C corporation): AssetAdjusted Basis FMV Cash $31,500 $ 31,500 Accounts receivable 46,900 46,900 Inventory206,000 269,000 Land 196,000 143,000 Totals $ 480, 400 $ 490,400 Tempe Corporation's businessincome for the year was $51,500 (this would have been its taxable income if it were a C corporation).During 2022, Tempe Corporation sold all of the inventory it owned at the beginning of the year for $302,000. a. What is its built-in gains tax in 2022? b. Assume the original facts, except that if TempeCorporation were a C corporation, its taxable income would have been $8,800. What is its built-in gainstax in 2022?

The built-in gains tax for an S corporation is determined by calculating and reporting it on Form…

Answered: 302,000. a. What is its built-in gains…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Which of the following statements is incorrect with respect to determining E&P? All tax-exempt income should be added back to taxable income. Dividends received deductions should be added back to taxable income. Charitable contributions in excess of the 10% taxable income limit should be subtracted from taxable income. Federal income tax refunds should be added back to taxable income. None of the above statements are incorrect MY ANSWER: 5. None of the above. Reasoning: All the above statements are correct with regard to the calculation of current E&P. E&P is the ability of the company to pay dividends to its shareholders. Am I correct? If not, please explain. Thank you in advance!
Required information [The following information applies to the questions displayed below.] Henrich is a single taxpayer. In 2023, his taxable income is $530,000. What are his income tax and net investment income tax liability in each of the following alternative scenarios? Use Tax Rate Schedule. Dividends and Capital Gains Tax Rates for reference. Note: Do not round intermediate calculations. Leave no answer blank. Enter zero if applicable. Round your final answers to 2 decimal places. b. His $530,000 of taxable income includes $2,000 of long-term capital gain that is taxed at preferential rates. Assume his modified AGI is $570,000. Answer is complete but not entirely correct. Income tax Net investment income tax Total tax liability Amount 159,251.75 x 2,000.00 x 161,251.75

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302,000. a. What is its built-in gains tax in 2022? b. Assume the original facts, except that if Tempe Corporation were a C corporation, its taxable income would have been $8,800. What is its built-in gains tax in 2022?