The built-in gains tax does not apply to S corporations that never operated as C corporations.

Name: The built-in gains tax does not apply to S corporations that never operated as C corporations.
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The built-in gains tax only applies to S corporations that previously operated as C corporations and have certain types of built-in gains when they switch to S status. S corporations that have never operated as C corporations are not subject to this tax.

The Built-In Gains Tax Does Not Apply to S Corporations