338(h)(10) Hybrid Purchase

by a searcher from University of Cambridge

5 months ago

Yesterday a colleague introduced me to the 338(h)(10) Hybrid election. There seem to be some outstanding benefits for buyers under the right circumstances. I was wondering if anyone has executed one of these, pros/cons of this option, etc.

0 likes
35 views
1 comment

professional from Boston College

Hi Michael, very common joint election in the purchase of an S Corporation. More recently, at least in my experience, a majority of the S Corporation acquisitions we do and see utilize a Type F pre-closing reorganization followed by a conversion/Q-Sub election to get the same tax outcome (equity deal treated as an asset purchase for tax purposes) without the limitations of 338(h)(10) and with the additional benefit of (largely) avoiding legacy Subchapter S risks. There are a number of articles out there on both alternatives or happy to chat if you shoot me a DM.

5 months ago | like reply | 1 like

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Self Funded Acquisition: A few Things I Learned

Examples of self-funded searcher websites

2 Best Ways To Find Motivated Sellers, Off-Market Deals

6-7x for a Self-funded Search Deal?

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.