Clampett, Inc. converted to an S corporation on January 1, 2015. At that time, Clampett, Inc. had cash ($54,000), inventory (FMV $74,000, Basis $37,000), accounts receivable (FMV $54,000, Basis $54,000), and equipment (FMV $74,000, Basis $94,000). In 2016, Clampett, Inc. sells its entire inventory for $74,000 Basis ($37,000). Assuming the corporate tax rate is 35%. How much built-in gains tax does Clampett, Inc. pay in 2016?

$12,950.

$0.

None of These.

$5,950.

$17,000.