Section 46 Stock Purchase Without I.R.C. 338 Election

• Library: Bus Trans 2005

As indicated in §10.38 above, an I.R.C. § 338 election is available only to a purchasing corporation that meets its terms. Consequently, individuals purchasing stock of a target corporation will not be able to avail themselves of I.R.C. § 338 as a means to step up the basis of the underlying assets of the target corporation. Instead, the assets of the target corporation will retain the same basis as existed before the sale of stock, and the purchaser will receive a basis in the stock equal to...