C corp converted to S corp results in B.I.G. tax.

This excerp is from the executive summary of an article cited below.

When a C corporation converts to an S corporation or an S corporation acquires assets from a C corporation in a tax-free transaction, it may be subject to a corporate-level “built-in gains” tax in addition to the tax imposed on its shareholders.
The corporation must determine whether it has a net unrealized built-in gain in its assets on the effective date of the relevant transaction. If it does, it must track its dispositions of these assets for the next 10 years.
Built-in gains recognized during this period are taxed at the highest rate of tax applicable to corporations (currently 35%).
Five issues are commonly encountered: (1) obtaining a proper appraisal as of the beginning of the recognition period; (2) treatment of sales of inventories during the recognition period; (3) application of the tax to corporations using the cash method of accounting; (4) efficient use of losses to reduce or eliminate the tax; and (5) use of C corporation attributes to reduce or eliminate the tax.