[Gatorbates]

Not an exam question, but a situation I’m in with my company. Aside from googling the 338 election, does anyone have experience with this and form 8023?

Licensed Florida CPA:
B: 71, 73, 79
A: 83
R: 78 (expired), 77
F: 74, 74, 80

It's finally freaking over.

[taxgeek83]

I don't have experience preparing them, but am familiar. Are you making the (h)(10) election? Either way, I think you're going to need to fill out the 8883 as well. If I remember right, it's generally done using the goodwill method – in other words, sales price minus value of tangibles and identifiable intangibles, leftover goes into Class VI & VII as goodwill. Double check me on that though – it's been a while since I've looked at one.

[Gatorbates]

Thanks, much appreciated!

Licensed Florida CPA:
B: 71, 73, 79
A: 83
R: 78 (expired), 77
F: 74, 74, 80

It's finally freaking over.

[taxgeek83]

No problem! Sounds like your company is acquiring the S Corp, but if not, look into the allocation/apportionment rules for any other states the target corp does business in. It's a really gray area, and it seems like most of the states have their own ways of taxing the gain on the transaction. If you're 100% Florida though, you should have an easy time with it. 🙂

[Gatorbates]

It's not acquiring the S-corp, rather purchasing it's assets, assuming it's lease liability (restaurant industry, small business, strictly FL). A brand new S-corp was formed, and this new S-corp is purchasing old S-corp's assets, and continuing on.

Licensed Florida CPA:
B: 71, 73, 79
A: 83
R: 78 (expired), 77
F: 74, 74, 80

It's finally freaking over.

[Author]

Replies