help this final answer. Clampett, Inc. converted to an S corporation onJanuary 1, 2015. At that time, Clampett, Inc. had cash($58,000), inventory (FMV $78,000, Basis $39,000),accounts receivable (FMV $58,000, Basis $58,000), andequipment (FMV $78,000, Basis $98,000). In 2016,Clampett, Inc. sells its entire inventoryfor $78,000 Basis ($39,000). Assuming the corporatetax rate is 35%. How much built-in gains tax doesClampett, Inc. pay in 2016?

Step 1: Definition of Built-in Gains TaxWhen a C corporation converts to an S corporation, it may be…

Answered: Clampett, Inc. converted to an S…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 45P

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Presented below are the financial balances for the BonGiovi Company and the TerensCompany as of December 31, 2017, immediately before BonGiovi acquired Terens. Also included are the fair values for Terens Company's net assets at that date (thousands of US$). BonGiovi BV31.12.2017 Terens BV 31.12.2017 Terens FV 31.12.2017Cash 870 240 240Receivables 660 600 600Inventory 1,230 420 580Land 1,800 260 250Buildings (Net) 1,800…
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XYZ Inc., was a C corporation through the end of year 6. Starting at the beginning of year 7, XYZ Inc., elected S corporation status. At the end of year 6, XYZ had accumulated earnings and profits (E & P) of $53,700. At the end of year 7, XYZ had a balance of $32,000 in its accumulated adjustments account (AAA). During year 8, XYZ had ordinary income of $15,300 and made distributions of $100,000. What amount of the distribution will be a taxable dividend to the shareholders of XYZ at the end of year 8? a.$1,000 b.$47,300 c.$52,700 d.$53,700
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