Election 338 g
WebS also has $10 of liabilities. Buyer ( B ) acquires 100% of S ’s outstanding stock for $20, and the parties make a Sec. 338 (h) (10) election. S ’s AGUB is $30: the $20 purchase price, increased by the assumed liabilities of $10. The inventory with FMV of $30 is therefore allocated tax basis of $30 under Regs. Sec. 1.338-6. WebJan 21, 2024 · From the seller’s perspective, a Section 338(g) election results in potential GILTI and/or Subpart F income, which may be offset, in whole or in part, by foreign tax credits. Generally, U.S. corporate shareholders are currently entitled to a 50% deduction on GILTI (reducing the tax rate from 21% to 10.5%) and an 80% deemed-paid foreign tax ...
Election 338 g
Did you know?
Web(i) On February 1 of Year 1, P acquires 25 percent in value of the R stock from B (the sole shareholder of P). That R stock is not acquired by purchase. See section 338(h)(3)(A)(iii). On that date, R owns 4 of the 100 shares of T stock. On June 1 of Year 1, P purchases an additional 25 percent in value of the R stock, and on January 1 of Year 2, P purchases … WebA 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 For elections under sections 338(g) and 338(h)(10) both the old target and the new
Web“The amendment made by subparagraph (A) [amending this section] shall apply to qualified stock purchases (as defined in section 338(d)(3) of the 1986 Code) after March 31, 1988, … WebDec 14, 2024 · Section 338(g) elections. When the Buyer makes a section 338(g) election, the tax year of the target CFC closes on the date of the sale of the stock and all of the CFC's prior tax attributes are ...
WebBoth types of Sec. 338 elections require that a purchaser acquire 80% of the vote and value of the target company’s stock. In the case of a Sec. 338 (g) election, the target recognizes gain on the deemed sale of its assets. The tax impact of this gain is borne by the acquirer. The target is then considered a new corporation with a stepped-up ... 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. …
Websection 338 elections for lower-tiered targets, whether one or more Forms 8023 are filed to make the elections. If, for example, P purchases target A, target A owns target B, and P makes a section 338 election for target A, this results in a deemed QSP of target B. To make an election for target B, complete and sign Form 8023 as if the purchasing
Web13 hours ago · or a section 338(h)(10) election; and (2) the acquisition is a qualified stock purchase. Section 338(h)(10) permits the purchasing corporation and sellers to elect jointly to treat the target corporation as deemed to sell all of its assets and distribute the proceeds in complete liquidation. A section 338(h)(10) election may be made for target ... scott chevrolet in allentownA 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 tax, whereas a 338(h)(10) election results in only one. In a regular Section 338 election, two levels of tax are imposed: one on the shareholders upon their sale of the target stock 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 … 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 shareholders and the acquiring … 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 … See more Thank you for reading CFI’s guide to Section 338 Election. To help you advance your career, check out the additional CFI resources below: 1. Section 368 2. Section 382 3. IRC Section 382 4. Type-A Reorganization 5. … See more scott chevrolet collision center allentown paWebFeb 1, 2024 · A purchaser making a Sec. 338(g) election obtains numerous benefits in the international context. For federal income tax purposes, a … pre or post tax health insurance