Clampett, Incorporated, converted to an S corporation on January 1, 2020. At that time, Clampett, Incorporated, had cash ($37,000), inventory (FMV $57,000, basis $24,000), accounts receivable (FMV $37,000, basis $37,000), and equipment (FMV $57,000, basis $77,000). In 2021, Clampett, Incorporated, sells its entire inventory for $57,000 (basis $24,000). Assume the corporate tax rate is 21 percent. Clampett, Incorporated's taxable income in 2021 would have been $1,000,000 if it had been a C corporation. How much built-in gains tax does Clampett, Incorporated, pay in 2021? Multiple Choice O O $9,870 $13,000 $2,730 $0 None of the choices are correct.

Clampett, Incorporated, converted to an S corporation on January 1, 2020. At that time, Clampett, Incorporated, had cash ($37,000), inventory (FMV $57,000, basis $24,000), accounts receivable (FMV $37,000, basis $37,000), and equipment (FMV $57,000, basis $77,000). In 2021, Clampett, Incorporated, sells its entire inventory for $57,000 (basis $24,000). Assume the corporate tax rate is 21 percent. Clampett, Incorporated's taxable income in 2021 would have been $1,000,000 if it had been a C corporation. How much built-in gains tax does Clampett, Incorporated, pay in 2021? Multiple Choice O O $9,870 $13,000 $2,730 $0 None of the choices are correct.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Clampett, Incorporated, converted to an S corporation on January 1, 2020. At that time, Clampett, Incorporated, had cash
($37,000), inventory (FMV $57,000, basis $24,000), accounts receivable (FMV $37,000, basis $37,000), and equipment
(FMV $57,000, basis $77,000). In 2021, Clampett, Incorporated, sells its entire inventory for $57,000 (basis $24,000).
Assume the corporate tax rate is 21 percent. Clampett, Incorporated's taxable income in 2021 would have been
$1,000,000 if it had been a C corporation. How much built-in gains tax does Clampett, Incorporated, pay in 2021?
Multiple Choice
O
O
$9,870
$13,000
$2,730
$0
None of the choices are correct.

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