In: Accounting
On July 22, 2016, Lilac Corporation purchased 25% of the Coffee Corporation stock outstanding. Lilac Corporation purchased an additional 40% of the stock in Coffee on March 24, 2017, and an additional 20% on May 2, 2017. On September 25, 2017, Lilac Corporation purchased the remaining 15% of Coffee Corporation stock outstanding. For purposes of the § 338 election, on what date does a qualified stock purchase occur? What is the due date for making the § 338 election?
There are few general requirements for a Section 338 election:
Therefore for the purpose of Section 338 election, date on which qualified stock purchased is May 2, 2017.
Due date for making the Section 338 election is the fifteenth day of the ninth month after the month in which 80% control of the target is acquired (i.e. within 8.5 months).