S Corporation Built-in Gains Tax . Delea Corporation made an Selection on January 1 of the current..

S Fortification Built-in Gains Tax . Delea Fortification made an Schoice on January 1 of the prevalent year. Delta had been a C fortification since its survival in 2003. The fortification has the forthcoming operating results during the prevalent year:

The adjusted reason and FMV of excellent property held on Januar y 1 and sold during the prevalent year were $200,000 and $320,000, respectively, as of Januar y 1 of the year in which the fortification's S choice became effective.

a. ls Delea Fortification theme to the built-in gains tax under Sec. 1374? Explain.

b. What is the fortification's tax jurisdiction on the built-in gain (if ry)?

c. How would your answers to Pares a and b fluctuate if Delta Corporation instead had made its Schoice effectual January 1, 2005?