Article Date:
November 2013

Word Count:



S Corporation Tax on Built-In Gains Is Trouble

Do you operate your business as a C corporation?


Would you like to operate that corporation as an S corporation so that you can avoid double taxation?


If so, you need to consider the built-in gains tax. The built-in gains tax scares away many C corporation owners who want to convert their business to an S corporation.


Should the built-in gains tax scare you? Will it apply?

The answer depends on the book and fair market values of the assets in your C corporation. For some businesses, the built-in gains tax will be a big problem.


How the Built-In Gains Tax Operates


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