Can an s corp make a 338 h 10 election

Author: diyi

August undefined, 2024

WebChad Huebsch, EA, CTC’S Post Chad Huebsch, EA, CTC Tax Advisor to 6 & 7 Figure SMB Business Exit Planning 2X Founder 7 Figure & 6 Figure Firms Webthat are allowed to make a Sec. 338(h)(10) election: 1. A corporation that is a subsidiary in a group that files a consolidated return. This requires the subsidiary’s stock be owned at least 80% by other members of the group. 2. A corporation that is a subsidiary in a group that is eligible to file a consolidated return but chooses not to. 3.

Asset Deals vs. Stock Deals for Pass-Through Entities

WebJun 1, 2024 · 338(g) election: Same as (1) above. 338(h)(10) election: N/A (6) Foreign corporation sells foreign sub to a U.S. corporation. 338(g) election: If the target was not a CFC, the deemed asset sale cannot produce Subpart F income and GILTI; if it was a CFC, those income items would not be taxable except to the target’s U.S. shareholder. … WebFeb 16, 2015 · 338(h)(10) Election (for S Corporations) – If this election is made jointly by the buyer and seller in a transaction, it effectively treats the sale of stock as an asset deal for tax purposes (buyer receives a … small sycamore tree

Selling Your S Corporation: A Focus on Alternative Tax …

WebWhat is a Section 338(h)(10) Election? A section 338(h)(10) election refers to an election under section 338(h)(10) of the federal tax code. If various conditions are met, the election allows the parties in a sale of stock of a corporation to treat the transaction for federal income tax purposes as if it had been structured as an asset sale. WebThe section 338(h)(10) election must be made not later than the 15th day of the 9th month beginning after the month in which the acquisition date occurs. (4) Irrevocability. A section 338(h)(10) election is irrevocable. If a section 338(h)(10) election is made for T, a section 338 election is deemed made for T. (5) Effect of invalid election. small systems operator

338(h)(10) Structure: Pros, Cons for Sellers, Buyers RKL LLP

About Form 8023, Elections Under Section 338 for Corporations …

WebAug 1, 2024 · There are two types of Sec. 338 elections. A Sec. 338(g) election is made only by the purchasing corporation, while a Sec. 338(h)(10) election is made jointly by the old target shareholders and the purchasing corporation. The instructions state that Form 8023 must be filed by the 15th day of the ninth month after the acquisition date to make a ... WebThe buyer and the seller jointly make a 338(h)(10) election. With this election, the buyer purchases the stock, which allows the target company to maintain non-transferrable … highway live cameraWebOct 4, 2010 · Elections under I.R.C. § 338(h)(10) have a history of creating troublesome results for taxpayers in the state tax context, such as concerns relating to the proper … highway liverpool victoria insurance

"WebOct 5, 2015 · A Section 338(h)(10) election can be made when one corporation purchases the stock of another corporation, and the election must be made jointly by the buyer … " - Can an s corp make a 338 h 10 election

Can an s corp make a 338 h 10 election

Tax Structures in Buying or Selling a Business

WebAre 338(h)(10) tax elections really the rage? Why isn't everyone doing it? A few restrictions... 1 Seller must be a US corporate subsidiary or an… WebNov 16, 2024 · What is an S corporation election? The S corp election is a request filed with the IRS to change a business’s tax status. When you elect S corporation status …

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WebJul 19, 2016 · A 338(h)(10) election allows a buyer of stock of an S corporation or a corporation within a consolidated group to treat the transaction as an acquisition of 100% of the assets of the target for tax … WebSep 27, 2011 · B insists that A consent to a 338(h)(10) election, which A agrees to do. A has a $0 basis in his S-corporation stock, and the S corporation has $0 of basis in its sole asset (goodwill). A may expect that he will pay tax on his $80 million of gain in Year One and additional tax when his earn-out payments are received. He is mistaken.

WebTaxable Stock Sale With Section 338(h)(10) Election Section 338(h)(10) provides in relevant part: “Under regulations prescribed by the Secretary, an election may be made under which if--(i) the target corporation was, before the transaction, a member of the selling consolidated group, and (ii) the target corporation recognizes gain or loss with WebThe purchasing corporation may also make an election under section 338 for target even though target is merged into another corporation, or otherwise disposed of by the …

WebThere are two types of section 338 elections. A section 338(g) election is made only by the purchasing corporation. A section 338(h)(10) election is made jointly by both the old target shareholders and the purchasing corporation. Form 8883 must be used to make both types of section 338 elections. WebThe Internal Revenue Code Section 338(h)(10) is a provision that allows for a special election to be made by an acquiring company when it purchases the assets of a target company. This election is primarily beneficial for buyers of S corporations, as it allows them to receive a step-up in basis for the assets acquired and to avoid double taxation.

WebDec 1, 2024 · The purchase of the stock of an S corporation or a subsidiary of a consolidated group can be treated as an asset purchase if a joint Sec. 338(h)(10) election is filed. The acquisition of stock of a …

WebFeb 3, 2024 · Individuals and partnerships cannot make a QSP, and are consequently unable to make a 338 election. However, individuals and partnerships can circumvent this restriction by forming a new corporation ("NewCo") to acquire the target’s stock. Foreign targets are not eligible for the 338(h)(10) election, but are eligible for the 338(g) election. highway litter pickersWebNov 17, 2024 · A sale where the buyer and seller make a section 338(h)(10) election; Section 338(g) Election. ... The seller may have a mix of capital and ordinary income and the buyer gets a stepped-up basis in the corporation’s assets. A section 338(h)(10) election could be an attractive option for a seller if they were an S-Corporation with a … small t ball batsWebSep 1, 2024 · One of buyers' main concerns is making and maintaining a valid S corporation election for the target of the Sec. 338(h)(10) election. Secs. 338(h)(10) and … highway link designWebBenefits and risks of a section 338(h)(10) election The U.S. Tax Code allows buyers and sellers of the stock of an S corporation to make a section 338(h)(10) election so that a … highway llc companyWebTaxes and Business Strategy Merle Erickson 24 Taxable stock acquisition (with a 338(h)(10) election) - New Fact Pattern T Corp A Corp T's Shareholders $$$ T Stock Example: 1. T has assets with basis of $100 (Cost = $500; Acc. Depr. = $400). 1 2. A pays T’s shareholders $1,000 for their stock. 3. T shareholder’s basis in the T Stock = $100 4. highway live trafficWebUnder section 338 (h) (10) of the Internal Revenue Code, the parties involved in the sale of an S corporation can jointly choose to make this election, which seems to benefit both … highway lndustrial co ltdWebInformation about Form 8023, Elections Under Section 338 for Corporations Making Qualified Stock Purchases, including recent updates, related forms and instructions on how to file. Purchasing corporations use Form 8023 to make elections under section 338 for the target corporation if they made a qualified stock purchase (QSP) of the target … highway live loads on concrete pipe