What is IRC 338 and when would a foreign buyer use a Section 338 election when acquiring a U.S. company?
My investment group from South Korea is acquiring 100% of a U.S. C-corporation. Our M&A attorney mentioned making a 'Section 338 election' that would treat the stock purchase as an asset purchase for tax purposes. He said this is common in cross-border acquisitions. Why would we want to do this? What are the benefits and downsides? And is there a special version for foreign buyers?
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