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?
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?
Chapter11: The Corporate Income Tax
Section: Chapter Questions
Problem 5P: Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of...
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Transcribed Image Text:Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed as
an S corporation became effective. Tempe Corporation's balance sheet at the end of 2021 reflected the
following assets (it did not have any earnings and profits from its prior years as a C corporation): Asset
Adjusted Basis FMV Cash $31,500 $ 31,500 Accounts receivable 46,900 46,900 Inventory
206,000 269,000 Land 196,000 143,000 Totals $ 480, 400 $ 490,400 Tempe Corporation's business
income 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 Tempe
Corporation were a C corporation, its taxable income would have been $8,800. What is its built-in gains
tax in 2022?
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