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 corporat...

1 Built in gain tax is charged at highest rate in treatment ...

Lockhart Corporation is a calendar-year corporation. At the beginning of 2013, its election to be taxed as

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Lockhart is a calendar-year At the beginning of 2013, its election to be taxed as an S became effective. Lockhart Corp.'s at the end of 2012 reflected the following assets (it did not have any earnings and profits from its prior years as a C

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. 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? Be sure to show your work.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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Lockhart Corporation is a calendar-year corporation. At the beginning of 2013, its election to be taxed as

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Lockhart Corporation is a calendar-year corporation. At the beginning of 2013, its election to be taxed as

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Adjusted Basis FMV Cash. $35,000 $35,000 Accounts receivable 25,000 25,000 Inventory 180,000 210,000 Land 125,000 120,000 S390,000 Totals S365,000

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Financial Accounting with IFRS Fold Out Primer

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