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Sheena Maskell Sheena Maskell
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Posts: 1902
7 years ago
Worthy Corporation elected to be taxed as an S corporation on January 1, of last year, effective last year. On that date, Worthy had land with a $70,000 basis and a $210,000 FMV. No net unrealized losses exist on the date of the S corporation election. The land is sold this year for $250,000. The tax result of the sale by Worthy is
A) no gain or loss recognized.
B) a Sec. 1231 gain of $180,000, none of which is subject to the built-in gains tax.
C) a Sec. 1231 gain of $180,000, all of which is subject to the built-in gains tax.
D) a gain of $140,000 subject to the built-in gains tax and a $40,000 gain subject to regular S-corporation pass-through rules.
Textbook 
Prentice Hall's Federal Taxation: 2011: Individuals

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
Authors:
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MsLippyMsLippy
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7 years ago
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Sheena M. Author
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7 years ago
I took a chance with your answer

It was right
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