Lava Corporation elected S corporation status on 1/1/2016, the basis and FMV of the assets of Lava on the date of Selection were as follows:

Basis FMV

Fixed Assets 40,000 30,000

Building 100,000 175,000

Goodwill - 300,000

In 2016, Lava sells the building for $200,000. Lava’s 2016 income if it were a C corporation would be $65,000. Calculate the built-in gains tax for 2016.

Answer rating: 100% (QA)

Solution Built in gain will be cal... View the full answer