Instructions for Form 8023

Instructions for Form 8023

Department of the Treasury

Internal Revenue Service

(Rev. October 2023)

Elections Under Section 338 for Corporations Making Qualified Stock Purchases

Section references are to the Internal Revenue Code

unless otherwise noted.

by all of the shareholders of the target, including

shareholders who do not sell target stock in the QSP.

Future Developments

When and Where To File

For the latest information about developments related to

Form 8023 and its instructions, such as legislation

enacted after they were published, go to IRS.gov/

Form8023.

What’s New

To more quickly and accurately process information

submitted to the IRS, the IRS is incorporating 2D barcode

technology and providing faster, more convenient

submission channels like electronic fax. Form 8023 was

selected by the IRS Digital Mobile and Adaptive Forms

team for 2D barcode redesign. The redesigned form

includes minor changes and barcode enhancements on

pages 1 and 2, and new page 3. This will improve intake

and ingest form data digitally, decreasing processing time.

General Instructions

Purpose of Form

Use Form 8023 to make elections under section 338 for a

corporation (the “target” corporation) if the purchasing

corporation has made a qualified stock purchase (QSP) of

the target corporation.

If a section 338(g) election is made for the target, the

target is treated for purposes of subtitle A of the Code as

having sold all of its assets on the acquisition date and

then as having purchased the assets as a new corporation

(“new” target) on the day after the acquisition date. For

periods on or before the acquisition date, the target is

sometimes referred to as the “old” target. In addition, the

target must recognize gain or loss on the deemed sale of

its assets.

If a section 338(h)(10) election is made for the target,

the target is generally treated as making the deemed sale

and liquidating. The treatment of the target shareholders

is generally consistent with the sale and liquidation

treatment. A section 338(h)(10) election cannot be made

for a target corporation unless it is acquired from a selling

consolidated group, a selling affiliate (as defined in

Regulations section 1.338(h)(10)-1(b)(3)), or an S

corporation shareholder (or shareholders).

Who Must File

Generally, a purchasing corporation must file Form 8023

for the target. If a section 338(h)(10) election is made for a

target, Form 8023 must be filed jointly by the purchasing

corporation and the common parent of the selling

consolidated group (or the selling affiliate or an S

corporation shareholder(s)). If the target is an S

corporation, a section 338(h)(10) election must be made

Aug 24, 2023

File Form 8023 by the 15th day of the 9th month after the

acquisition date to make a section 338 election for the

target corporation. In the case of a foreign purchasing

corporation, see Special Instructions for Foreign

Purchasing Corporation, later.

For electronic fax (only to be used for Form 8023 and

related attachments; other items will not be processed). Please fax to 844-253-9765 (this is toll free).

The fax cover sheet should include the following.

• Subject: Form 8023.

• Sender's name, title, phone number, and street

address.

• Date.

• Number of pages faxed (including cover sheet).

Do not include sensitive information on the cover

sheet, such as employer identification number (EIN) or

social security number (SSN). Fax may not exceed 100

pages. If you do not have access to electronic fax, mail

your completed Form 8023 to:

Internal Revenue Service

OTSA Mail Stop 4916

1973 Rulon White Blvd.

Ogden, UT 84201

Elections for Multiple Targets

One Form 8023 (rather than multiple forms) may be used

for targets that meet the following three requirements.

1. Each has the same acquisition date.

2. Each was a member of the same affiliated group

(defined below) immediately before the acquisition date.

3. Each is a member of the same affiliated group

immediately after the acquisition date.

All of the information that would be required for the

additional targets if a separate Form 8023 were filed must

be provided for that target in schedules attached to the

form. If a form is used to make an election under section

338 for more than one target, check the box on line 9. In

an attached schedule, provide the information requested

in Sections A-1, A-2, B, C, and D for each target

corporation other than the one shown in Section B of the

form. In the schedule, also state which elections are made

for each target (that is, information corresponding to lines

6, 7, 8, and 9 of Section E). Include the appropriate

signature or signature attachment for each target. See

Signature(s), later.

One special instruction applies to section 338 elections

for lower-tiered targets, whether one or more Forms 8023

Cat. No. 24987I

requested on this form for each purchasing corporation

other than the one listed in Section A-1. Also provide a

schedule that lists which target stock was acquired by

each purchasing corporation.

are filed to make the elections. If, for example, P

purchases target A, target A owns target B, and P makes

a section 338 election for target A, this results in a

deemed QSP of target B. To make an election for target B,

complete and sign Form 8023 as if the purchasing

corporation(s) of the directly purchased target were the

purchasing corporation(s) of the lower-tiered target.

Section A-2—Common Parent of the

Purchasing Corporation

If the purchasing corporation is a member of a

consolidated group, complete Section A-2.

Definitions

Section C—Common Parent of Selling

Consolidated Group, Selling Affiliate,

S Corporation Shareholder, or U.S.

Shareholder

Qualified stock purchase (QSP). A QSP is the

purchase of at least 80% of the total voting power and

value of the stock of a corporation by another corporation

during a 12-month acquisition period. Preferred stock (as

described in section 1504(a)(4)) is not included in

computing voting power or value. See section 338(h)(3)

for the definition of “purchase.”

If Form 8023 is filed to make a section 338(h)(10) election

for a target that is an S corporation, the information

requested in Section C must be provided for each

shareholder of the S corporation target. Attach a schedule

with respect to the other shareholders. If Form 8023 is

filed to make a section 338 election for a target that is or

was a controlled foreign corporation (CFC), enter in

Section C the name of the U.S. shareholder that owned

the largest percentage (by value) of the target's stock

immediately before the acquisition date. If two or more

U.S. shareholders acquired equal amounts of target stock,

enter the name of any one of them in Section C. On an

attached schedule, provide the information requested on

this form for each U.S. shareholder other than the one

listed in Section C. If a U.S. shareholder is a member of a

consolidated group other than the common parent, also

provide the name and EIN for the common parent of the

U.S. shareholder's group.

Acquisition date. This is the first day on which a QSP

has occurred.

12-month acquisition period. This is generally the

12-month period beginning with the first acquisition by

purchase of stock included in the QSP. See section 338(h)

(1) for additional rules. Also see Regulations section

1.338-8(j)(2).

Affiliated group. This is an affiliated group as defined in

section 1504(a), determined without regard to the

exceptions contained in section 1504(b).

Specific Instructions

Employer identification number (EIN). An EIN must be

included for each corporation identified in Section A-1,

A-2, B, or C or on attached schedules. An EIN is not

required if the corporation does not have, and is not

otherwise required to have, an EIN.

Line 4b. Identifying numbers. Enter the SSN for an

individual. Enter the EIN for a corporation.

Section E—Elections Under Section

338

Tax year ending. The tax year ending date of any

corporation is determined without regard to any QSP.

Country of incorporation. When identifying the country

of incorporation, include political subdivisions, if any.

Line 8. Gain recognition election. If a gain recognition

election is made for a target, it applies to the purchasing

corporation and all members of its affiliated group that

hold nonrecently purchased target stock (that is, stock in

the target acquired prior to the 12-month acquisition

period). See Regulations section 1.338-5(d). If a section

338(h)(10) election is made for a target, a gain recognition

election is deemed made by each purchasing group

member.

If a gain recognition election is actually made (not

deemed made) for a target corporation, attach a schedule

providing the target corporation's name and the name,

address, and EIN of each purchasing group member

holding nonrecently purchased stock. The schedule must

also contain the following declaration (or a substantially

similar declaration): “EACH CORPORATION HOLDING

STOCK SUBJECT TO THIS GAIN RECOGNITION

ELECTION AGREES TO REPORT ANY GAIN UNDER

THE GAIN RECOGNITION ELECTION IN ITS FEDERAL

INCOME TAX RETURN (INCLUDING AN AMENDED

RETURN, IF NECESSARY) FOR THE TAX YEAR IN

WHICH THE ACQUISITION DATE OF THE TARGET

OCCURS.”

Foreign Entity

If the purchasing corporation is a foreign entity, check the

box in Section A-1.

If the common parent of the purchasing corporation is a

foreign entity, check the box in Section A-2.

If the target corporation is a foreign entity, check the

box in Section B.

If the common parent of the selling consolidated group,

selling affiliate, S corporation shareholder, or U.S

shareholder is a foreign entity, check the box in Section C.

Section A-1—Purchasing Corporation

If more than one member of an affiliated group purchases

stock of the target corporation listed in Section B (or

identified on an attached schedule), enter in Section A-1

the name of the corporation that acquired the largest

percentage (by value) of the target's stock in the QSP. If

two or more affiliates acquired equal amounts of target

stock, insert the name of any one of them in Section A-1.

On an attached schedule, provide the information

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Instructions for Form 8023 (Rev. 10-2023)

shareholder specified in the statement is correct. Write

“See attached” in the signature area of Form 8023.

As an alternative to a jointly signed statement, the

shareholder signatures may be shown on separate

statements attached to Form 8023. If a U.S. shareholder is

not an individual or does not have delegated authority to

sign the statement, the person signing must state under

penalties of perjury that he or she is authorized to sign the

statement for the U.S. shareholder. File Form 8023 for the

foreign purchasing corporation's tax year that includes the

acquisition date.

The schedule must be signed on behalf of each

purchasing group member holding nonrecently purchased

target stock by a person who states under penalties of

perjury that he or she is authorized to act on behalf of the

corporation.

A gain recognition election for the target also applies to

any target affiliate that has the same acquisition date as

the target and for which a section 338 election is made.

Attach a schedule with the information requested above

for each such target affiliate.

Signature(s)

Form 8883. Each U.S. shareholder must also file Form

8883, Asset Allocation Statement Under Section 338, with

Form 5471. See the Instructions for Form 8883.

If the common parent of a consolidated group is the agent

of the purchasing corporation under Regulations section

1.1502-77, the person authorized to sign the statement of

section 338 election is the person authorized to act on

behalf of that common parent.

When to file. Special rules may apply to foreign

purchasing corporations. The time during which a

qualifying foreign purchasing corporation may make a

section 338 election for a qualifying foreign target is

described in Regulations section 1.338-2(e)(1).

If a QSP of a target corporation is made by two or more

corporations that are members of the same affiliated (but

not consolidated) group, Form 8023 must be signed by a

person authorized to sign on behalf of each corporation.

Special Instructions for Foreign Targets

Unless otherwise specifically noted, the general rules and

requirements in these instructions apply to foreign targets.

If a section 338(h)(10) election is made for an S

corporation, Form 8023 must be signed by each S

corporation shareholder regardless of whether the

shareholder sells his or her interest in target stock in the

QSP.

A section 338 election will not be valid for a target that

is a CFC, a passive foreign investment company, or a

foreign personal holding company unless affected U.S.

persons who own stock in these targets are notified in

writing, according to Regulations section 1.338-2(e)(4).

If multiple signatures are required, the signatures must

be provided on a “SIGNATURE ATTACHMENT” to the

form under the appropriate “declaration under penalties of

perjury” (this is the statement that appears on Form 8023

immediately above the relevant signature line). Write “See

attached” in the signature area of the Form 8023.

Form 8883. Each U.S. shareholder must also file Form

8883 with Form 5471. See the Instructions for Form 8883.

Attachments. Attach a schedule listing the date of each

purchase of foreign target stock, each purchaser's name,

the percentage purchased by each purchaser, and the

name and place of incorporation of any selling entities. If

affected U.S. persons owning stock in the target are

notified, attach a schedule containing the name and EIN

or SSN of each U.S. person.

Special Instructions for Foreign

Purchasing Corporations

Unless otherwise specifically noted, the general rules and

requirements in these instructions apply to foreign

purchasing corporations.

Paperwork Reduction Act Notice. We ask for the

information on this form to carry out the Internal Revenue

laws of the United States. You are required to give us the

information. We need it to ensure that you are complying

with these laws and to allow us to figure and collect the

right amount of tax.

Who must file. Generally, the purchasing corporation

must file Form 8023. However, the U.S. shareholders of

controlled foreign purchasing corporations described in

Regulations section 1.338-2(e)(3) may make the section

338 election for the purchasing corporation. The

shareholders may make this election only if the

purchasing corporation is not required under Regulations

section 1.6012-2(g) to file a U.S. income tax return for the

tax year that includes the acquisition date.

Each U.S. shareholder must also attach Form 8023 to

the Form 5471, Information Return of U.S. Persons With

Respect to Certain Foreign Corporations, filed for the

purchasing corporation for the tax year that includes the

acquisition date.

To make this election, complete Form 8023 and attach

a statement to the form showing the name, address,

identifying number, country in which organized, and stock

interest of each U.S. shareholder. The statement must be

signed by each U.S. shareholder. When signing the

statement, each U.S. shareholder must state under

penalties of perjury that the stock interest for that

Instructions for Form 8023 (Rev. 10-2023)

You are not required to provide the information

requested on a form that is subject to the Paperwork

Reduction Act unless the form displays a valid OMB

control number. Books or records relating to a form or its

instructions must be retained as long as their contents

may become material in the administration of any Internal

Revenue law. Generally, tax returns and return information

are confidential, as required by section 6103.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated

burden for business taxpayers filing this form is approved

under OMB control number 1545-0123 and is included in

the estimates shown in the instructions for their business

income tax return.

If you have comments concerning the accuracy of

these time estimates or suggestions for making this form

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simpler, we would be happy to hear from you. You can

send us comments from IRS.gov/FormComments. Or

write to the Internal Revenue Service, Tax Forms and

Publications Division, 1111 Constitution Ave. NW,

IR-6526, Washington, DC 20224. Do not send Form 8023

to this address. Instead, see When and Where To File,

earlier.

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Instructions for Form 8023 (Rev. 10-2023)