No Code Section 336 or 338 Election Clause Samples

The "No Code Section 336 or 338 Election" clause prohibits either party from making certain tax elections under Sections 336 or 338 of the Internal Revenue Code in connection with the transaction. These sections allow for the treatment of a stock sale as an asset sale for tax purposes, which can have significant tax consequences for both buyer and seller. By including this clause, the parties ensure that the transaction will not be recharacterized for tax purposes, thereby providing certainty regarding the tax treatment and preventing unexpected tax liabilities or benefits.