Gilmer Corporation, a cash-based taxpayer, made an S election effective for calendar year 20x6. On January 1, 20x6, the balance sheet revealed the following assets:

 

	FMV	Adjusted Basis	Built-in Gain/Loss
Cash	5,000	5,000	0
Accounts Receivable	30,000	0	30,000
Inventory	55,000	45,000	10,000
Land	95,000	80,000	15,000
Investment	5,000	65,000	(60,000)
Accounts Payable	(25,000)	0	(25,000)
NUBIL	165,000	195,000	(30,000)

 

Therefore, Gilmer claimed that it was not liable for the built-in gains tax, since there is no NUBIG; that is, there is a NUBIL. You determined that Gilmer had goodwill valued at $80,000.

What is Gilmer Corporation's true NUBIG?

Answer rating: 100% (QA)

To determine Gilmer Corporations true Net Unrealized BuiltIn Gain NUBIG you need to calcula... View the full answer