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X Corp., a regular C corporation, elects S status on 9/7/x6, when its only asset is a capital asset with a FMV of $500,000, basis $200,000.
X Corp. sells the capital asset on 10/16/x7 for $850,000, resulting in a capital gain of $650,000.
A is a 40% shareholder in X Corp.
Assume the tax rate is 21%.
48.
In 20x7, X Corp. incurs a tax of
In 20x7, X Corp. incurs a tax of
$136,500.
None of these.
$63,000.
0.
49.
In 20x7, as a result of the sale, A will report
In 20x7, as a result of the sale, A will report
$260,000 capital gain and $68,250 ordinary loss.
None of these.
$260,000 capital gain and $25,200 ordinary loss.
$260,000 capital gain and $68,250 capital loss.
$260,000 capital gain and $25,200 capital loss.
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