Can an individual buyer make a 338 H 10 election?

Limitations of 338(h)(10) election The buyer and seller (all stockholders) must jointly make the election – it cannot be unilaterally made by one side. For legal purposes, a 338(h)(10) election remains a stock sale despite being deemed an asset sale for tax purposes.

Why might a parent corporation make a sec 338 election after acquiring a target corporation’s stock when would such an election not be advisable?

A. The acquiring parent corporation might make a Sec. 338 election if it desires to use the tax attributes of the target corporation in the year the reorganization takes place. ​ However, the election should not be made when the target corporation does not have any beneficial tax attributes.

How is an S Corp taxed when sold?

If the S-corp is sold, the company itself pays no taxes, even if the sale results in capital gains. (Remember that the IRS considers the sale of any corporation as the sale of its combined assets.) These assets are called “goodwill and going concern,” according to the IRS.

Can a 338 h )( 10 election be made for LLC?

However, an LLC taxed as a partnership is not eligible to make a 338(h)(10) election. Solution. Many states’ statutes now allow a corporation to merge into an LLC, and vice versa. The parties could agree to merge the target S corporation into a new LLC to be formed by the investment group.

Can an S Corp make a 338 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 qualified stock purchase will be treated as a deemed asset purchase2 for federal income tax purposes.

Can an S corporation make a 338 g election?

338 election. This election can be made when the acquiring corporation (the buyer) makes a qualifying purchase of 80% or more of the target company’s stock. The target company can be either a C corporation or an S corporation, and the buyer can be either a C corporation or an S corporation.

Can an S Corp make a 338 g election?

Can an S Corp make a 338 H 10 election?

How do I transfer ownership of an S Corp?

Transferring Ownership of Stock within an S Corporation

  1. Follow the corporation’s explicit stock transfer processes.
  2. Draft an agreement for the stock transfer.
  3. Execute the agreement then attain consideration.
  4. Record the transfer in the stock ledger of the corporation.
  5. Prepare to consent to an S corporation election.

Can an S Corp be sold?

Selling stock is the easiest method of structuring an S Corp sale. If you choose this solution, you will deduct the money received by the owner of the business from selling the stock from the S corporation share tax basis.

Can an S Corp buy its own stock?

Also known as a stock redemption, stock repurchase allows an S corporation to regain control over shares surrendered by a shareholder. The S corporation may repurchase either all or part of the shareholder’s interest in the company, depending on the shareholder’s preferences.

Who can make a 338 election?