ACT 550: Module 4 CT

Option #2: Section 338 Election and Stock Acquisition

Green Leaf Corporation acquired the stock of Apple Corporation and made a valid Section 338 election in conjunction with the stock seller to treat the stock purchase as an asset purchase. Prepare a letter to Green Leaf Corporation in which you answer the following:

1. How this choice is permissible under Section 338, including the specific subsection applicable to this scenario;
2. How the deemed asset sale should be reported on the target company’s consolidated income tax return; and
3. Why Green Leaf Corporation would choose to treat the acquisition this way — what benefit do they stand to gain?

Submission Requirements

• Support your paper with at least 4-6 tax, scholarly, legislative, or court references

Your paper should be 3-5 pages in length and conform APA writing style