"Corporate Liquidations, Taxable Acquisition Transactions, and Nontaxable Reorganizations" IRC Section 338 allows a deemed sale election generating immediate taxation...

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"CorporateLiquidations, Taxable Acquisition Transactions, and NontaxableReorganizations"
IRC Section 338 allows a deemedsale election generating immediate taxation to the targetcorporation and a stepped-up or stepped-down basis to the pricepaid by the acquiring corporation for the target corporation stockplus liabilities on the deemed sale. Examine at least one (1)benefit of a Section IRC 338 liquidation election for a targetcorporation. Create a scenario that would demonstrate a favorableIRC Section 338 liquidation election for a target corporation.

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Answer IRC 338 is often favourable for buyers in corporate acquisitions Sec 338 permits a corporation that makes a qualified stock purchase of another corporation to elect to treat such acquisition as an asset rather than a share acquisition for federal tax purposes In general the impact of a Sec 338 election is that a stock acquisition is treated as an asset acquisition and therefore the tax basis of the assets held by the target company is stepped up to the purchase price Sec 338 elections generally take one of two forms the Sec 338 g election which is most useful in the case of See Answer

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"CorporateLiquidations, Taxable Acquisition Transactions, and NontaxableReorganizations"IRC Section 338 allows a deemedsale election generating immediate taxation to the targetcorporation and a stepped-up or stepped-down basis to the pricepaid by the acquiring corporation for the target corporation stockplus liabilities on the deemed sale. Examine at least one (1)benefit of a Section IRC 338 liquidation election for a targetcorporation. Create a scenario that would demonstrate a favorableIRC Section 338 liquidation election for a target corporation.