If a parent corporation makes a § 338 election, the subsidiary corporation is treated as a new corporation as of the day following the qualified stock purchase date.

Question

Quizplus · Accepted Answer

A § 338 election allows a parent corporation that has made a qualified stock purchase of a subsidiary to treat the purchase as an asset acquisition for tax purposes, effectively treating the subsidiary as a new corporation starting the day after the purchase.

If a Parent Corporation Makes a § 338 Election, the Subsidiary