A Sec. 338(h)(10) election can allow parties to a business acquisition to treat a statutory stock purchase as a deemed asset sale for income tax purposes, potentially benefiting both the buyer and the seller. This article discusses the election’s mechanics, eligibility rules, and tax consequences, as well as practical deal considerations.
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Formation, Liquidation & Reorganization
M&A termination fees under Sec. 1234A: Developments since 2016
Capital gains vs. ordinary income treatment hinges on the nature of the underlying contractual rights or obligations and the underlying property.
Using a divisive D reorganization to shift ownership by creating a new S corporation
A Type D tax-deferred spinoff or split-off followed by an S election may be available if the reorganization meets the requirements of Sec. 355 and Sec. 368(a)(1)(D), including a valid corporate business purpose.
Planning for domestication transactions
Foreign companies can realize benefits from establishing domicile in the United States if they observe structural and special rules and considerations.
Startups and the OBBBA: Rethinking C corporation vs. passthrough
With enhanced Sec. 1202 gain exclusion, permanency of Sec. 199A, and other provisions, the calculus for entity choice has shifted.
Identifying the final C corporation and initial S corporation tax years
Rules determine allowable tax years after a C corporation elects S status.
Frequently encountered controversy issues in M&A transactions
Procedural issues involving entity change in mergers and acquisitions can be managed by attentiveness and, in many cases, relief provisions.
Dissolving business taxpayers: Selected procedural implications
Critical issues include marking returns as final, determining due dates for final returns, filing Form 966, closing IRS accounts, and handling audits of dissolved entities.
Revisiting Sec. 1202: Strategic planning after the 2025 OBBBA expansion
This powerful vehicle for excluding gain on qualified small business stock gains even more traction under new legislation.
Sec. 382 and exceptions to the segregation rules
Determining whether an ownership change under Sec. 382 has occurred can hinge on understanding the shareholder aggregation and segregation rules.
IRS renews corporate tax opportunities with letter rulings
After decades of limiting private letter ruling issues, the IRS has steadily widened its program, providing taxpayers greater certainty.
Consolidated return filing for subsidiary in receivership
An IRS letter ruling confirmed that a subsidiary member of a consolidated group remains a part of the group and its consolidated return despite being in receivership under a court order that requires its eventual liquidation and dissolution.
Choice-of-entity analysis with the TCJA sunset approaching
Educators as well as practitioners can model the tax effects of choice of entity and possible scenarios of tax law change.
Exposing the hidden disqualified individuals of Sec. 280G
Potential denial of a deduction for the corporation and an excise tax on individuals receiving “excess parachute payments” could pose a hazard as a company approaches a change in control.
Sec. 338(g) elections for foreign corporations and ‘creeping acquisitions’
Electing a qualified stock purchase can offer advantages when acquiring a foreign target corporation but also present a pitfall when it is done in stages.
Recent developments in Sec. 355 spinoffs
Tax-free reorganizations under Sec. 355 may pose unforeseen complications, including implications for the new corporate alternative minimum tax and stock repurchase excise tax.
Liquidating a controlled subsidiary tax-free
A parent corporation does not recognize gain or loss on its subsidiary’s liquidation and can succeed to certain of its tax benefits.
M&A transactions: The value of sell-side tax diligence
This item highlights how sell-side tax diligence can mitigate risks.
Capital loss rules limit deduction of fees paid to terminate merger agreement
Chief Counsel Advice provides insight to taxpayers planning or negotiating merger-and-acquisition transactions.
Freezing stock value with a corporate recapitalization
A corporate recapitalization can freeze the value of the owner’s stock, potentially reducing the owner’s estate tax liability by removing future appreciation in the value of stock from the owner’s estate.
PRACTICE MANAGEMENT
2026 tax software survey
CPAs rate their return preparation software’s performance during this year’s tax season.
