The corporate built-in gains tax does not apply to a corporation that has always been taxed as an S corporation.

Question

Quizplus · Accepted Answer

The corporate built-in gains tax only applies to C corporations that have converted to S corporations and still have assets that were appreciated in value during the time they were a C corporation. If a corporation has always been an S corporation, it was never a C corporation and therefore would not be subject to the built-in gains tax.

The Corporate Built-In Gains Tax Does Not Apply to a Corporation