Rivendell Corporation uses the accrual method of accounting and has the following assets as of the end

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Rivendell Corporation uses the accrual method of accounting and has the following assets as of the end of 2021. Rivendell converted to an S corporation on January 1, 2022.


a) What is Rivendell’s net unrealized built-in gain at the time it converted to an S corporation?

b) Assuming the land was valued at $200,000, what would be Rivendell’s net unrealized gain at the time it converted to an S corporation?

c) Assuming the land was valued at $125,000 but that the inventory was valued at $85,000, what would be Rivendell’s net unrealized gain at the time it converted to an S corporation?

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Taxation Of Individuals And Business Entities 2023 Edition

ISBN: 9781265790295

14th Edition

Authors: Brian Spilker, Benjamin Ayers, John Barrick, Troy Lewis, John Robinson, Connie Weaver, Ronald Worsham

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