S Corporation Built-in Gains Tax. Delta Corporation made an Selection on January 1 of the current year. Delta had been a C corporation since its inception in 2003. The corpora- tion has the following operating results during the current year: Ordinary income $200,000 Long-term capital gains 130,000 The adjusted basis and FMV of capital assets held on January 1 and sold during the cur- rent year were $200,000 and $320,000, respectively, as of January 1 of the year in which the corporation's S election became effective. a. Is Delta Corporation subject to the built-in gains tax under Sec. 1374? Explain. b. What is the corporation's tax liability on the built-in gain (if applicable)? c. How would your answers to Parts a and b change if Delta Corporation instead had made its Selection effective January 1, 2005