A section 338 transaction is a stock acquisition treated as an asset acquisition based on an election made by the acquirer.

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Section 338(h)(10) of the Internal Revenue Code allows the acquirer in a stock acquisition to make an election to treat the transaction as if the target company's assets were purchased instead. This can have tax advantages for the acquirer, as it allows them to benefit from a stepped-up basis in the assets and claim additional depreciation or amortization deductions.

A Section 338 Transaction Is a Stock Acquisition Treated as an Asset