Which of the following statements is correct with respect to the § 338 election?
A) The subsidiary corporation makes the § 338 election.
B) A qualified stock purchase occurs when a corporation acquires in a taxable transaction at least 80% of the stock (voting power and value) of another corporation within an18-month period.
C) The parent recognizes no gain (loss) as a result of the election.
D) Gain but not loss is recognized by the subsidiary as a result of a deemed sale of its assets.
E) None of these.

Question

Quizplus · Accepted Answer

In a § 338 election, the parent corporation recognizes no gain or loss as a result of the election. The election allows the parent to treat the stock purchase as an asset purchase for tax purposes.

Which of the Following Statements Is Correct with Respect to the §