1120-US: Calculating the built-in gain tax (FAQ)

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Question

How does UltraTax/1120 calculate the built-in gain tax?

Answer

The built-in gain tax is calculated on the Built-In Gains Tax Worksheet. UltraTax CS prints this worksheet when there is data entered in any of the following places.

The built-in gain tax is allocated to the category of income in which the tax was generated. For example, if the S Corporation disposed of both a long-term capital asset and an ordinary income asset that was subject to the built-in gain tax, a portion of the tax would be allocated to the long-term capital gain, and a portion of the tax would be allocated to the ordinary income.

Related topic: 1120-US: Built-in gain tax calculation for S Corporations FAQs

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