Built-in Gain Tax

Built-in Gain Tax means:
a corporate-level tax applied to any unrealized gain attributable to appreciation in the value of all assets held by a C corporation that elects to become an S corporation. The highest corporate rate is applied to the recognized built-in gains of the S corporation for the tax year or to the amount that would have been taxable to the C corporation, whichever is less. Former IRC (check if this IRC provision is current here) §1374.