WebJan 31, 2024 · Purchase price allocations for tax purposes are required when an acquisition is structured as an asset transaction or a stock transaction with an IRC §338 election (or a deemed asset transaction). Under IRC §1060, both the buyer and the seller are required to use the residual method to allocate the purchase price to the specific assets that ... WebA §338 (h) (10) Election avoids the shareholder-level tax by treating the target as having liquidated following the deemed asset sale. This Portfolio identifies the characteristics and qualifications of a stock purchase, the timing, and the acquisition date.
Benefits of a Section 338 Election to a US Buyer of CFC Stock
WebPurchasing corporations use this form to make elections under section 338 for the target corporation if they made a qualified stock purchase (QSP) of the target corporation. About … WebAug 20, 2024 · Alternatively, consider that the buyer makes a section 338 (g) election, and the CFC recognizes $100 of asset gain subject to GILTI and has another $50 of operational income through the date of sale, which is also subject to GILTI. Because the CFC tax year closes, the seller is generally taxed on $150 of GILTI income at 10.5% ($15.75 of tax). the pc name is already being used
About Form 8023, Elections Under Section 338 for …
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. Who Must File WebAn election under section 338 may be made for target after the acquisition of assets of the purchasing corporation by another corporation in a transaction described in section 381 … WebAs a result of the Sec. 338 (h) (10) election, Buyer is viewed as owning New Target, and New Target has a cost basis in the assets it is deemed to have purchased from Target. But is it possible that a second tax will result, one that Sec. 338 (h) (10) normally does not evoke? shy pia delivery