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In December of the current year $($assume $2023),$ Missouri Corporation considers a sale of certain corporate assets

that would result in the recognition of a $$55,$OOO LTCG$.$ Missouri's controller estimates that taxable income for the

current year will be $$71,000($ xcluding the LTCG$).$ She also estimates that taxable income for next year will be

$$225,000($excluding the LTCG$).$

Read the requirements.

Requirement a$.$ What is Missouri's tax liability for the two years if the assets are sold in the current year?

$($Complete all input fields. Enter a $0$ for amounts with a zero value.$)$

Requirement b$.$ What is Missouri's tax liability for the two years if the assets are sold next year? $($Complete all

input fields. Enter a $0$ for amounts with a zero value.$)$

Requirement c$.$ Should Missouri sell the assets in the current year or next year? Explain.

A$.$ Missouri should sell the assets next year, because doing so results in the lower combined tax liability for

the two year period.

B$.$ Missouri should sell the assets in the current year, because doing so results in the lower combined tax

liability for the two year period.

c$.$ Missouri should sell the assets in the current year, because they will be taxed at a lower rate. If the assets

are sold next year, when Missouri's income is significantly higher, the LTCG will be taxed at a higher rate.

D$.$ Because of the flat tax rate on corporate income, the total tax amount paid across the two years is the

same regardless of when the assets are sold. Accordingly, it comes down to a tradeoff between Missouri's

need for the cash from the sale of the assets and the time value of money related to the tax liability

cenerated hu the sale

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