Aple inc a cash basis s corporation in orange texas

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Reference no: EM13391014

Apple, Inc. a cash basis S corporation in Orange, Texas, formerly was a C corporation. Apple has the following assets and liabilities on January 1, 2010, the date the S election is made:





Adjusted Basis Fair Market Value
Cash $200,000 $200,000
Accounts receivable -0- $105,000
Equipment $110,000 $100,000
Land $1,800,000 $2,500,000
Accounts payable -0- $110,000

During 2010, Apple collects the accounts receivable and pays the accounts payable. The land is sold for $3 million, and taxable income for the year is $590,000. What is Apple's built-in gains tax?

$0
$206,500
$590,000
$695,000

 

Reference no: EM13391014

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