SEC Corporation has been operating as a C corporation since 2018. It elected to become an S corporation, effective January 1, 2022. On December 31, 2021, SEC reported a net unrealized built-in gain of $18,000. In addition to other transactions in 2022, SEC sold inventory it owned at the beginning of 2022 (it did not sell any other assets it owned at the beginning of 2022). At the beginning of the year, the inventory it sold had a fair market value of $48,000 and a FIFO tax basis of $31,000. SEC sold the inventory for $36,000. If SEC had been a C corporation in 2022, its taxable income would have been $52,000.

 

How much built-in gains tax must SEC pay in 2022?