Irc section 338 sale
Web─Under section 338(h)(10) of the IRC, a sale of the stock of a corporate subsidiary or an S corporation is treated as if the corporation had sold its assets and distributed the sale proceeds to its shareholders in liquidation. ─The incident of tax is the deemed sale of the corporation’s assets by the target corporation. WebOct 1, 2024 · From a tax perspective, the parties must address two key issues: (i) whether to structure the sale as a taxable or tax-deferred transaction (either in whole or in part) and (ii) whether to structure the sale to obtain a step-up in the basis of the acquired assets.
Irc section 338 sale
Did you know?
WebJun 1, 2024 · Note, however, that a stock sale is unlikely to offer any asset basis step-up unless an election under Sec. 338 or Sec. 336 (e) is allowed. The purchaser often has business reasons for using a holding company to purchase target stock. WebJul 26, 2016 · Section 338 (h) (10) of the Internal Revenue Code can provide significant tax benefits to a buyer of 80% or more of a target corporation. A 338 (h) (10) election allows a buyer of stock of...
WebFeb 13, 2004 · Congress decided to adopt the residual method already provided for in regulations under section 338, in order to ensure that the value of the business in excess of the value of tangible assets was allocated to goodwill or some similar intangible, rather than to tangible assets with short depreciable lives. WebI. California Treatment of Deemed Sale under IRC section 338(h)(10). For federal tax purposes, pursuant to IRC section 338(h)(10)(A), the rules pertaining to an IRC section 338(h)(10) election are contained in Treasury Regulation section 1.338(h)(10)-1. Based on Treasury Regulation section 1.338(h)(10)-1(c), the target corporation, the stock
WebJul 26, 2016 · Section 338(h)(10) of the Internal Revenue Code can provide significant tax benefits to a buyer of 80% or more of a target corporation. A 338(h)(10) election allows a buyer of stock of an S corporat WebI.R.C. § 338 (i) (1) —. regulations to ensure that the purpose of this section to require consistency of treatment of stock and asset sales and purchases may not be …
The United States Congress enacted Section 338 in 1982 to allow taxpayers to treat certain qualified stock purchases as asset acquisitions for federal income tax purposes. Section 338 provides two elections: the so-called “regular Section 338 election” under Section 338 (g), and the other under Section 338 … See more A Section 338(h)(10) election is much more common than a Section 338(g) election because the 338(g) election results in two levels of … See more An S Corporation is a regular corporation that has 100 shareholders or less, which enables the company to enjoy the benefits of incorporation but be taxed as if it were a partnership. S Corporations typically do not pay taxes and … See more Due to the double imposition of the tax, a regular Section 338 election often is unattractive and typically is made only when the target has significant tax attributes (e.g., net operating losses) to offset the gain … See more If the target is an S corporation and a stock purchase is desired for non-tax reasons, but an asset purchase is desired for tax reasons, it is necessary for the target S corporation’s … See more
WebFor Sec. 338 transactions, the regulations make this determination clear, citing application of general tax principles (Regs. Sec. 1.338-7 (e), Example 1 (satisfaction of contingent liability results in P ’s taking the liability into account as … dutch oven brotformWebNov 19, 2024 · A section 338(h)(10) election cannot be made for a target corporation unless it is acquired from a selling consolidated group, a selling affiliate (as defined in … dutch oven brownie recipeWebTo make a Sec. 338 election, a number of statutory and regulatory limitations must be met, including: The buyer must be a corporation; The buyer must acquire at least 80% of the … crypturellus undulatus wikizeroWebAbout Form 8883, Asset Allocation Statement Under Section 338 Use Form 8883 to report information about transactions involving the deemed sale of corporate assets under … dutch oven bud spencer bohnenWebNov 17, 2024 · A section 338(h)(10) election allows the buyer and seller to enter into a stock purchase agreement which generally does not require transfer or consent for the transfer … dutch oven brownies campfireWebIf a buyer purchases the stock of the target and a section 338 (h) (10) election were not made, the selling consolidated group would have $60 of tax gain and, after closing, the target would continue to have $50 of inherent gain in … dutch oven bushcraftWebA Section 338 (h) (10) election also allows certain taxpayers to treat a stock sale as an asset sale, which results in a step-up in the basis of the target corporation’s assets. The … dutch oven brownies