336(e) reorg

searcher profile

October 03, 2024

by a searcher from Charles Sturt University in New Jersey, USA

Has anyone done 336(e) reorg and willing to share the procedural elements (how to execute)? My tax accountant is not familiar with it.

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commentor profile
Reply by a professional
from University of Michigan in Detroit, MI, USA
Are you referring to Section 336(e) of the IRC? If so, that isn't really a reorganization. Instead, it's a tax election--you want to treat a stock sale as an asset sale for tax purposes, correct?

If you're interested in the actual mechanics of making the election, there are two high-level steps (I'm assuming the target is an S-corp., as this election normally comes up in that context).

i(1) the S corp. and the S-corp.'s shareholders must enter into a timely agreement to make the election.
(2) an election statement must be attached to the S-corp.'s timely filed income tax return for the tax year that includes the sale.

As a caveat, I'm a corporate lawyer, not a tax lawyer (so this post is definitely not legal advice). And as with all things tax, there are traps for the unwary. It sounds like your accountant isn't the right partner for you to complete this deal. You should seek the advice of a tax lawyer (we have one on staff if you are interested).

Let me know if I can help further. Feel free to DM me here or reach out directly at redacted
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Reply by an intermediary
from Wake Forest University in Winston-Salem, NC, USA
As ^redacted‌ mentioned, it is an election, similar to a 338(h###-###-#### My suggestion would be to do a little home work, and then getting with an attorney and/or CPA (there are several of both that participate on this site) that are familiar with 336(e), 338(h)(10), or F-reorgs (if that is what you were after) to determine the right solution for your transaction.
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