Question

Eva Corporation was a C Corporation from​ January​ 1, 2009 through December​ 31​ , 2019 . On​ January​ 1, 2020​ , Eva Corporation made an S Corp election. On December​ 31​ , 2019​ , Eva Corporation had the following assets .

  Asset FMV Tax Basis

Cash ​ $100,000 ​ $100,000

Inventory ​ 900,000 ​ 600,000

Building                ​1,000,000 ​ 300,000

Total ​ $2,000,000 ​ $1,000,000

During 2020​ , Eva Corporation sold the inventory on hand at December​ 31, 2019 for​ $1,200,000. Also during​ 2020, Eva Corporation purchased inventory at a cost of​ $1,000,000. This inventory was sold in 2020 for​ $2,000,000. What amount of Built in Gains Tax must Eva Corporation pay in​ 2020?

A.​$0

B.​$126,000

C.​$320,000

D.​$63,000​

Answer 1

Answer:

I think the answer of this question is b