ABC, Inc. converted to an S corporation on January 1, 2015. At that time, ABC Inc. had cash ($40,000), inventory (FMV $60,000, Basis S30,000), accounts receivable (FMV $40,000, Basis $40,000), and equipment (FMV $60,000, Basis $80,000). In 2016, ABC, Inc. sells its entire inventory for $60,000 (Basis $30,000) Assuming the corporate tax rate is 35% and that ABC, Inc. had a $20,000 net operating loss carryover from its prior C corporation years. How much built-in gains tax does ABC, Inc. pay in 2016? $10, 500. $10,000. $3, 500. $0. None of these