Sec. 338 elections take two forms: the Sec. 338 (g) election, used for foreign acquisitions, and the Sec. 338(h)(10) election, used in domestic cases.
Obtaining an objective valuation is a key component of the restructuring process.
Perhaps the most significant difference in approach relates to the way in which contingent liabilities assumed in a business combination are reported.
By employing a cost segregation study, a significant portion of a property may be reclassified to a shorter life category.
When a company embarks on an international restructuring, it is extremely important to consider the impact of Section 367.
When valuation is important for tax purposes, breakdown by legal entity is key since each has its own tax identity and related tax consequences.
In the case of a U.S. acquisition of a foreign target, it was oftentimes beneficial to make a Section 338(g) election.
The impact of the investor model is that it essentially guarantees a return to the intangibles developer for its efforts.
In general, the impact of a Sec. 338 election is that a stock acquisition is treated as an asset acquisition.
Obtaining a valuation from an independent valuation provider is essential to proving that the security has no liquidating value.