Reference no: EM132726284
Problem 1: Clampett, Inc., converted to an S corporation on January 1, 2019. At that time, Clampett, Inc., had cash ($58,000), inventory (FMV $78,000, basis $39,000), accounts receivable (FMV $58,000, basis $58,000), and equipment (FMV $78,000, basis $98,000). In 2020, Clampett, Inc., sells its entire inventory for $78,000 (basis $39,000). Assume the corporate tax rate is 21 percent. Clampett, Inc.'s taxable income in 2020 would have been $1,000,000 if it had been a C corporation. How much built-in gains tax does Clampett, Inc., pay in 2020?
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