In assessing whether to use a § 338 election, considerations include
A)Tax benefits resulting from the step-up in basis enabled by a § 338 election (e.g., increased depreciation) are deferred.
B)When part of the basis is assigned to goodwill, no tax benefit is obtained until the acquired business is sold.
C)Future tax savings being discounted to determine their present value
D)All of the above

Question

Quizplus · Accepted Answer

All of the above considerations should be taken into account when assessing whether a § 338 election is beneficial. The tax benefits resulting from the step-up in basis are deferred, there may not be an immediate tax benefit if part of the basis is assigned to goodwill, and future tax savings should be discounted to determine their present value.

In Assessing Whether to Use a § 338 Election, Considerations