Borran, Inc. has been an S Corporation for the three years. Prior to that, the owner(s) of Borran conducted business in a different form. At the time Borran became an S corporation, Borran owned investment securities with a basis of $20,000 and a value of $30,000 at the time of the S corporation election. If Borran sells these securities for $40,000 in the current year, Borran will be subject to an entity level tax on built-in gains if ______________.

Question options:

	a. Borran was operating as a partnerhip prior to the S corporation election
	b. Borran was operating as a sole proprietorship prior to the S corporation election
	c. Borran was operating as a limited liability company prior to the S corporation election
	d. Borran was operating as a C corporation prior to the S corporation election