Irc section 338 sale

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August undefined, 2024

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. 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

Chief Counsel Ruling 2024-01 - California

WebSection 338 (g) Election In the case of a Sec. 338 (g) election, the target recognizes gain on the deemed sale of its assets. This tax impact of this gain is borne by the acquirer. The target is then considered a new corporation with a stepped-up basis in the assets. WebSection 338 (d) defines a qualified stock purchase as one where the transaction occurs within a 12- month acquisition period and also satisfies the elements of §1504 (a). … greenford quay apartments

Installment Reporting for Sales of S Corporation Stock with a 338 …

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. WebNov 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 … WebAbout Form 8883, Asset Allocation Statement Under Section 338 Use Form 8883 to report information about transactions involving the deemed sale of corporate assets under … flushing queens ny obituaries

IRC Section 338 Election - McGuire Law Firm

Instructions for Form 8023 (11/2024) Internal Revenue …

WebUse Form 8883 to report information about transactions involving the deemed sale of corporate assets under section 338. This includes information previously reported on Form 8023, Elections Under Section 338 for Corporations Making Qualified Stock Purchases. Current Revision Form 8883 PDF Instructions for Form 8883 PDF ( Print Version PDF) WebSection 338 (h) (10) Election Scenario 1 You’ve found a great company whose acquisition you believe would advance your objectives. Its stock is valued at $1.5 million. But then upon discussion with the target company, and you discover that the company’s tax basis in its assets is only $500,000. You’re faced with a new dilemma. flushing queens new york hotelsWebI.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 … greenford quay for sale

"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 " - Irc section 338 sale

Irc section 338 sale

WebDec 13, 2011 · IRC Section 338(h)(10) Gains for Sales Factor Purposes When a company has a gain from a deemed asset sale under IRC Section 338(h)(10), a determination must be …

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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... WebThe deemed asset sale treatment may have negative tax consequences that selling shareholders need to consider. By agreeing to make a section 338(h)(10) election, selling shareholders may subject themselves to various federal and state taxes that a straight stock sale — one without a section 338(h)(10) election — would not generate.

WebSection 338 generally allows the purchaser of stock in certain stock transactions to treat the transaction as though the target corporation sold all of its assets for their fair market value immediately after the stock purchase. 3 An election under §338, as opposed to a 338 (h) (10) election, does not impact the tax treatment of the selling … Webthe CAT as a gross receipt from the sale of a capital asset. IRC section 338(h)(10) Election . For federal income tax purposes, taxpayer may elect to treat certain stock sales as asset sales. When the taxpayer makes this election pursuant to IRC section 338(h)(10), the sale of the stock of a business is treated as the sale of the business ...

WebTo 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 … WebThis is accomplished by making a special tax election under either IRC Section 338 or 336. As discussed above, a significant driver in favor of asset sale treatment is the expansion of immediate expensing to used assets. To qualify for this deduction, however, the buyer and seller have to be unrelated for tax purposes.

WebNov 17, 2024 · A sale where the buyer and seller make a section 338(h)(10) election; Section 338(g) Election. A section 338(g) election allows a stock acquisition to be treated like an asset acquisition for tax purposes. This causes the transaction to have the same tax effects for an asset acquisition, such as creating a basis step-up in the assets and double ...

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 greenford quay greystarWebJun 18, 2024 · In simple terms, a 338(h)(10) is a tax election for a qualified stock purchase (QSP), which recharacterizes a stock purchase as an asset purchase for federal tax … flushing queens nyWebthe basis of the purchasing corporation ’s nonrecently purchased stock. (2) Adjustment for liabilities and other relevant items. The amount described in paragraph (1) shall be … flushing queens ny homes for saleWebA section 338 (h) (10) election is made jointly by P and the selling consolidated group (or the selling affiliate or the S corporation shareholders) on Form 8023 in accordance with the … flushing queens real estateWebFor purposes of the preceding sentence, an election under section 338(g) of the Internal Revenue Code of 1986 (or an election under section 338(h)(10) of such Code qualifying … greenford quay buyWebApr 7, 2024 · IRC Section 338 (g) provides a similar election for a qualified stock purchase of a standalone C Corporation. This election typically only makes sense when a C Corporation has significant tax losses or credit carryovers or with acquisition of certain foreign corporations. greenford quay jobsWebFor 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 … greenford quay resident portal