The Tax Accounting Implications of Changing Your Mind – 338 Elections Not Made

The Tax Accounting Implications of Changing Your Mind – 338 Elections Not Made | Neil Bass

Internal Revenue Code Section 338 provides a unique opportunity to treat a stock deal as an asset deal for income tax purposes. Taxpayers generally have 8 ½ months after a stock acquisition to file a “338 election” with the IRS to accomplish this treatment. The election typically results in a “step-up” in the tax basis of the acquired assets for the buyer, allowing for greater depreciation and amortization deductions for years to come.

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