
Ask A Question - Help - Register - Login

Is the built in gains tax triggered in a straight 100% ...

Sent to Tax Experts May 14 2:02 a.m.

Is the built in gains tax triggered in a straight 100% stock sale of an S corporation (prior to the passage of the 10 year period) or only if there is an asset sale or the buyer makes a 338(h)(10) election?

Customer (name blocked for privacy)

Status: Closed Value: $30

Info Request
May 14 9:54 a.m. (7 hours and 52 minutes later)

Hello and thank you for using Just Answer. Is the S corp. or a individual making the sale of S corp. stock? Sec 338(h)(10) is for the gain or loss of stock by selling consolidated group corporation.

__________________
Marvin-If my answer is a benefit to you please "Accept". Your positive feedback is appreciated.

Marvin,EA -- Enrolled Agent -- 99% Positive Feedback on 448 Tax Accepts
10 years self employed , Income Tax Preparation & Representation

Reply
Sent May 14 10:08 a.m. (14 minutes and 7 seconds later)

The S corp is owned by two individuals (not part of a consolidated group) who both are selling all of their shares to a third party.It is not conteplated that the sellers will agree to allowing the buyer to make the 338(h)(10) election since that will definitely trigger the built in gains tax. I am trying to confirm if they do not allow such an election will the buyers be able to avoid the built in gains tax and any potential built in gains tax simply passes to the buyer in case the s corp sells any of the appreciated assets prior to the expiration of the 10 year period which began in 2001. I need the authoritive cite for your answer.

Customer (name blocked for privacy)

Nobody has been able to answer this question yet. Can you help answer it?
Click here to become an Expert.

Related Answers:

	DISCLAIMER: You acknowledge that any information you may obtain from individuals you contact through use of the Just Answer service comes from those individuals, not from Just Answer!, and that Just Answer is not in any way responsible for any of the information these third parties may supply. The site and services are provided "as is" with no warranty and no representations are made regarding the qualification of an Expert. Responses and comments on Just Answer! are for general information and are not intended to substitute for informed professional advice (such as medical, legal, investment or accounting) and do not establish a professional-client relationship. Just Answer! is not intended or designed to address EMERGENCY QUESTIONS which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service.

Just Answer! > Income Tax