What is lockharts built-in gains tax in 2013

Assignment Help Financial Management

Reference no: EM131971072

Lockhart Corporation is a calendar-year corporation. At the beginning of 2013, its election to be taxed as an S corporation became effective. Lockhart Corp.'s balance sheet at the end of 2012 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	$35,000	$35,000
Accounts receivable	25,000	25,000
Inventory	180,000	210,000
Land	125,000	120,000
Totals	$365,000	$390,000

Lockhart's business income for the year was $65,000 (this would have been its taxable income if it were a C corporation).

During 2013, Lockhart sold all of the inventory it owned at the beginning of the year. What is its built-in gains tax in 2013? Be sure to show your work.

Assume the same facts as in part (1), except that if Lockhart were a C corporation, its taxable income would have been $17,000. What is its built-in gains tax in 2013? Be sure to show your work.

Assume the original facts except the land was valued at $115,000 instead of $120,000. What is Lockhart's built-in gains tax in 2013? Be sure to show your work.

Reference no: EM131971072

Questions Cloud

Evaluate the impact that hybrid-car technology has had : Evaluate the impact that hybrid-car technology has had or could have on the United States' political relationships with oil-producing countries.

What is the present value of the growing perpetuity : You are evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $21,000 at the end of this year

Evaluate the importance of applications of queuing theory : Evaluate the importance of applications of queuing theory in a health services environment. Provide one example of this importance to support your evaluation.

Calculate the appropriate number of bond and equity futures : Calculate the appropriate number of bond and equity futures that should be sold. You may assume that the portfolio of German equities has a beta.

What is lockharts built-in gains tax in 2013 : Lockhart's business income for the year was $65,000 (this would have been its taxable income if it were a C corporation).

Describe a communication system that will have the impact : Describe a communication system that will have the greatest impact on improving the situation, and specify the major reasons why your system will influence.

Find the effect of this transaction on companys assets : What is the effect of this transaction on the company's assets, liabilities, and income before income taxes?

Calculate value of the option using given model : A European call option on a stock that is epexted to pay two dividends during the life of the option: a $0.95 dividened in two months, and a $1.00 dividend.

Summarize the requirements for an effective hearing : Summarize the requirements for an effective hearing conservation program and discuss steps to make the program as effective as possible.

User Account

All Pages