338(h)(10) Election Clause Samples
A 338(h)(10) Election is a tax provision that allows certain stock purchases of a corporation to be treated as asset acquisitions for federal income tax purposes. In practice, this election is typically made when a parent company sells the stock of a subsidiary, and both the buyer and seller agree to treat the transaction as if the subsidiary sold all its assets and then liquidated. This enables the buyer to step up the tax basis of the acquired assets, potentially resulting in future tax benefits such as increased depreciation deductions. The core function of the 338(h)(10) Election is to provide tax flexibility and efficiency in corporate acquisitions by aligning the tax treatment with the economic substance of the transaction.
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338(h)(10) Election. (a) Buyer and Alcan Corp. shall make a joint election under Section 338(h)(10) of the Code, and comparable provisions of state or local Law, with respect to the purchase and sale of the US Shares (the “Section 338(h)(10) Election”) and shall timely file executed copies of Internal Revenue Service Forms 8023 and 8883, the required schedules thereto and any similar state or local forms with the proper Governmental Authorities.
(b) Buyer shall prepare at its sole cost and expense and deliver to Sellers within thirty (30) days of the North America Closing Statement having become final, binding and non-appealable in accordance with Section 3.4 a draft schedule (the “Allocation Schedule”) allocating the aggregate deemed sales price, within the meaning of the Treasury regulations applicable to Section 338(h)(10) of the Code, among the assets of the US Company in accordance with the requirements of such regulations. The Allocation Schedule shall be prepared on a basis consistent with the methodology set forth on Exhibit H attached hereto. Alcan Corp. shall provide Buyer with such information (and documentation in support thereof) as is required by Buyer to prepare and deliver the Allocation Schedule to the extent Alcan Corp. has such information. Within thirty (30) days after its receipt of the Allocation Schedule, Alcan Corp. shall prepare at its sole cost and expense and deliver to Buyer any proposed changes thereto. If Buyer and Alcan Corp. cannot reach agreement with respect to any disputed matter related to the Allocation Schedule, the dispute shall be submitted for resolution to the Accounting Firm. Such firm’s determination with respect to the disputed matter shall be made within sixty (60) days of its submission to such firm and shall be final and binding on the Parties, and any fees and expenses relating to the engagement of such firm shall be shared equally by Buyer and Sellers. The Allocation Schedule finally determined in accordance with the foregoing provisions shall be binding upon Buyer and Sellers, and Buyer, Sellers and the US Company shall file their Tax Returns on a basis consistent with the Allocation Schedule.
338(h)(10) Election. If Buyer makes the 338 Request (which it can make in its sole discretion at any time), then the following shall occur:
(a) Buyer shall make the Election with respect to its purchase of the Shares hereunder; (b) before the deadline as established by the IRS, Buyer shall prepare and file an IRS Form 8023, including all additional data and materials required to be attached to such Form 8023 pursuant to the instructions thereto; (c) Buyer shall take all other actions necessary and appropriate (including filing IRS Form 8883 and such additional forms, returns, elections, schedules and other documents as may be required) to effect and preserve such Election in accordance with Section 338(h)(10) of the Code, the Treasury regulations thereunder, any and all comparable provisions of applicable state and local law and any successor provisions; (d) within 10 calendar days after Buyer has filed IRS Form 8023 and IRS Form 8883 for the Election, Buyer shall provide counsel for Seller with a copy of each form (as filed) and written proof of filing with the IRS and any other taxing authority at the address set forth in this Agreement; and (e) Buyer shall take no action inconsistent with, and shall not fail to take any action necessary for, the approval and continuing validity of the Election, such prohibited activities to include any action or position inconsistent with the Election or otherwise disputing the validity of the Election upon examination of any tax return, in any refund claim, in any litigation or otherwise with respect to such tax returns.
338(h)(10) Election. Provided all of the holders of Seller Common Stock consent to the 338(h)
338(h)(10) Election. Seller and ▇▇▇▇▇▇▇ hereby covenant and agree with Buyer that, if the Buyer so determines that a Section 338(h)(10) Election should be made, the Seller and ▇▇▇▇▇▇▇ will join in the making of an election under Section 338(h)(10) of the IRC. The Buyer shall be responsible for the preparation and filing of such IRS forms and other documents that may be required to effect the 338(h)(10) election for federal and state income tax purposes, and Seller and ▇▇▇▇▇▇▇ agree to provide Buyer with such information as may be required to properly complete any such forms and other documents, and shall execute such forms and documents. The Buyer, Seller and ▇▇▇▇▇▇▇ agree that for purposes of allocating the consideration being paid (which shall equal the Purchase Price, as adjusted, plus the liabilities being assumed or to which the assets being acquired under this Agreement are subject) amongst the assets of the Company in order to compute the amount of taxable gain resulting from the “deemed) sale of assets (as required by IRC Section 338(h)(10) and the regulations thereunder), the residual method of allocation shall be used. For purposes of computing gain or loss with respect to any goodwill or going concern value of the Company, the excess of the total amount of consideration “deemed” paid over the adjusted basis (as last determined on the Company’s tax books and records) of the Company’s assets (other than goodwill and going concern value) shall be allocated and be considered to be paid for the Company’s goodwill and going concern value. For purposes of computing gain or loss on the Company’s assets other than goodwill and going concern value, that portion of the consideration equal to the adjusted basis of the Company’s assets (other than goodwill and going concern value) shall be allocated to each such Company asset in an amount equal to such adjusted basis. In the event that a determination is made by the IRS or another taxing authority that results in an assessment of tax as a result of a re-allocation of consideration from goodwill or going concern value and to another Company asset that is taxed at other than the more favorable capital gain’s rate, then Buyer shall pay to Seller an amount equal to: (a) the amount obtained when (i) the amount of such gain so computed which is subject to taxation at income tax rates other than capital gains rates is multiplied by (ii) the difference between the income tax rate at which such gain is taxed minus the capital gains tax r...
338(h)(10) Election. Purchaser may request that the Company and Seller make elections under Section 338(h)(10) of the Internal Revenue Code, or other, similar sections of the Internal Revenue Code (and regulations promulgated thereunder) if it is determined by the parties that such election will not have any adverse impact on Seller.
338(h)(10) Election. The parties shall each cause to be made, or otherwise take all actions consistent with causing to be made, an election to treat the transaction contemplated by this Agreement under Section 338(h)(10) of the Code. In connection with the 338(h)(10) election, for tax and accounting purposes, the parties agree to allocate all consideration under this Agreement in accordance with Schedule 6.9 (the “Allocation”). The parties shall also allocate and report any adjustments to the Final Closing Consideration (including pursuant to Section 1.3(e) or Section 7.9) in accordance with the Allocation. The parties agree that all income and other Tax returns and information reports will be prepared and filed in a manner consistent with the Allocation, and no party hereto will take any position inconsistent with the Allocation in any subsequent returns or proceedings. Each party shall furnish or cause to be furnished to the other, upon request, as promptly as practicable, such information and assistance relating to the Company as is reasonably necessary for the proper filing of Tax returns and the making of the Tax election described in this Section.
338(h)(10) Election. The Sellers shall join the Buyer in making an election under Code Section 338(h)(10) (and any corresponding election under state, local, or foreign law) (a “Section 338(h)(10) Election”) with respect to the Buyer’s purchase of the Company Shares pursuant to this Agreement. The Buyer will be responsible for the preparation of all forms and schedules required to be filed in connection with any Section 338(h)(10) Election (“Section 338 Forms”), including IRS Form 8023 and all attachments required to be filed therewith pursuant to the applicable Treasury Regulations (“Form 8023”) and including Form 8883, and the expense related to such preparation. The Sellers shall cooperate in executing any Section 338 Forms and shall execute and deliver to the Buyer prior to or at the Closing any Section 338 Forms that it is required to execute (or join in executing with the Buyer) including Form 8023 and Form 8883. The Buyer shall retain the original of each completed and executed Section 338(h)(10) Election and shall be responsible for filing such election with the Internal Revenue Service.
338(h)(10) Election. Buyer and Seller shall join in making a valid, timely election under Section 338(h)(10) of the Code (and any corresponding elections under state and/or local tax law, collectively, a “338(h)(10) Election”) with respect to the Buyer’s acquisition of the Shares in accordance with applicable statutes, rules and regulations, including IRS Form 8023 and Treasury Regulation Section 1.338(h)(10)-1. Seller shall deliver or cause to be delivered to Buyer at Closing IRS Form 8023 properly and fully executed and completed with respect to Buyer's acquisition of the Shares. Buyer shall prepare a properly and fully completed IRS Form 8883 pursuant to Treasury Regulation Section 1.1060-1 or shall take such other action required pursuant to the Treasury Regulations under Section 338(h)(10) of the Code to report the allocation of the Purchase Price (the “Purchase Price Allocation”). Seller agrees that, within fifteen (15) days of receiving the Purchase Price Allocation, complying with the requirements of the preceding sentences it shall sign the Purchase Price Allocation and return an executed copy thereof to the Buyer. Neither Seller nor Buyer shall, nor shall permit any of their Affiliates to, file any Tax Return, or take any position with a taxing authority, that is inconsistent with the Purchase Price Allocation.
338(h)(10) Election. (a) To the extent permitted by applicable Tax laws, Quiksilver and Buyer will jointly make a timely and effective election under Section 338(h)(10) of the Code and Treasury Regulations Section 1.338(h)(10)-1 and, if permissible, any and all similar elections under any applicable state or local income Tax laws with respect to the purchase and sale of the Shares of the Company pursuant to this Agreement (together, the “Section 338(h)(10) Election”). Quiksilver (i) shall include all items of income, gain, loss, deduction, credit and other Tax items resulting from the Section 338(h)(10) Election on its Tax Returns (including consolidated returns) to the extent required by applicable law and (ii) shall pay any Taxes attributable to making the Section 338(h)(10)
338(h)(10) Election. The Shareholder Parties will make a section 338(h)(10) election. Each of the parties hereto agrees to report this transaction for United States federal and state tax purposes and for the purposes of any other applicable jurisdiction in accordance with the allocation of the Merger Consideration set forth on Schedule 7.7 and to timely and properly file all required United States federal and state tax forms and applicable taxes of any other jurisdiction based on such allocation. Each shareholder will be responsible for his or her respective Income Taxes as calculated under the Section 338(h)(10) election. However, the Shareholder Parties will not be responsible for any federal and state corporate built-in gain taxes under Section 1374 or equivalent state tax provisions.