Cashback Offer from 1st to 15th March 2021. Get Flat 20% Cashback credited to your account for a minimum transaction of $80. Post Your Question Today!

Question DetailsNormal
$ 9.00

Lockhart Corporation is a calendar-year corporation | Complete Solution

Question posted by
Online Tutor Profile
request

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).

  1. During 2013, Lockhart sold all of the inventory it owned at the beginning of the year for $250,000. What is its built-in gains tax in 2013? Be sure to show your work.
  2. 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.
  3. 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?
Available Answer
$ 9.00

[Solved] Lockhart Corporation is a calendar-year corporation | Complete Solution

  • This solution is not purchased yet.
  • Submitted On 03 Jan, 2015 09:57:09
Answer posted by
Online Tutor Profile
solution

taxable income would have been $17,000. What is its built-in gains tax in 2013?

Answer: If, however, the corporation’s taxable income was only $17000, then $8000 ($25000 – $17000) of ...

Buy now to view the complete solution
Other Similar Questions
User Profile
Exper...

Lockhart Corporation is a calendar-year corporation | Complete Solution

taxable income would have been $17,000. What is its built-in gains tax in 2013?

Answer: If, however, the corporation’s taxable income was only $17000, then $8000 ($25000 – $17000) of the recognized built-...

The benefits of buying study notes from CourseMerit

homeworkhelptime
Assurance Of Timely Delivery
We value your patience, and to ensure you always receive your homework help within the promised time, our dedicated team of tutors begins their work as soon as the request arrives.
tutoring
Best Price In The Market
All the services that are available on our page cost only a nominal amount of money. In fact, the prices are lower than the industry standards. You can always expect value for money from us.
tutorsupport
Uninterrupted 24/7 Support
Our customer support wing remains online 24x7 to provide you seamless assistance. Also, when you post a query or a request here, you can expect an immediate response from our side.
closebutton

$ 629.35