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Section A-2—Common

declaration): “EACH CORPORATION

described in Regulations section

HOLDING STOCK SUBJECT TO THIS

1.338-2(e)(3) may make the section 338

Parent of the Purchasing

GAIN RECOGNITION ELECTION

election for the purchasing corporation.

Corporation

AGREES TO REPORT ANY GAIN

The shareholders may make this election

UNDER THE GAIN RECOGNITION

only if the purchasing corporation is not

If the purchasing corporation is a member

ELECTION IN ITS FEDERAL INCOME

required under Regulations section

of a consolidated group, complete

TAX RETURN (INCLUDING AN

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

Section A-2.

AMENDED RETURN, IF NECESSARY)

for the tax year that includes the

Section C—Common

FOR THE TAX YEAR IN WHICH THE

acquisition date.

ACQUISITION DATE OF THE TARGET

Parent of Selling

To make this election, complete Form

OCCURS.”

8023 and attach a statement to the form

Consolidated Group,

The schedule must be signed on behalf

showing the name, address, identifying

Selling Affiliate, S

of each purchasing group member holding

number, country in which organized, and

nonrecently purchased target stock by a

stock interest of each U.S. shareholder.

Corporation Shareholder,

person who states under penalties of

The statement must be signed by each

or U.S. Shareholder

perjury that he or she is authorized to act

U.S. shareholder. When signing the

on behalf of the corporation.

statement, each U.S. shareholder must

If Form 8023 is filed to make a section

state under penalties of perjury that the

338(h)(10) election for a target that is an S

A gain recognition election for the

stock interest for that shareholder

corporation, the information requested in

target also applies to any target affiliate

specified in the statement is correct. Write

Section C must be provided for each

that has the same acquisition date as the

“See attached” in the signature area of

shareholder of the S corporation target.

target and for which a section 338 election

Form 8023.

Attach a schedule with respect to the other

is made. Attach a schedule with the

shareholders. If Form 8023 is filed to make

information requested above for each

As an alternative to a jointly signed

a section 338 election for a target that is or

such target affiliate.

statement, the shareholder signatures

was a controlled foreign corporation

may be shown on separate statements

Signature(s)

(CFC), enter in Section C the name of the

attached to Form 8023. If a U.S.

U.S. shareholder that owned the largest

shareholder is not an individual or does

If the common parent of a consolidated

percentage (by value) of the target's stock

not have delegated authority to sign the

group is the agent of the purchasing

immediately before the acquisition date. If

statement, the person signing must state

corporation under Regulations section

two or more U.S. shareholders acquired

under penalties of perjury that he or she is

1.1502-77, the person authorized to sign

equal amounts of target stock, enter the

authorized to sign the statement for the

the statement of section 338 election is

name of any one of them in Section C. On

U.S. shareholder. File Form 8023 for the

the person authorized to act on behalf of

an attached schedule, provide the

foreign purchasing corporation's tax year

that common parent.

information requested on this form for

that includes the acquisition date.

each U.S. shareholder other than the one

If a QSP of a target corporation is made

Form 8883. Each U.S. shareholder must

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

by two or more corporations that are

also file Form 8883, Asset Allocation

a member of a consolidated group other

members of the same affiliated (but not

Statement Under Section 338, with Form

than the common parent, also provide the

consolidated) group, Form 8023 must be

5471, Information Return of U.S. Persons

name and EIN for the common parent of

signed by a person authorized to sign on

With Respect to Certain Foreign

the U.S. shareholder's group.

behalf of each corporation.

Corporations. See the Instructions for

Line 4b. Identifying number. Enter the

Form 8883.

If a section 338(h)(10) election is made

social security number (SSN) for an

for an S corporation, Form 8023 must be

When to file. Special rules may apply to

individual. Enter the EIN for a corporation.

signed by each S corporation shareholder

foreign purchasing corporations. The time

regardless of whether the shareholder

during which a qualifying foreign

Section E—Elections

sells his interest in target stock in the QSP.

purchasing corporation may make a

Under Section 338

section 338 election for a qualifying

If multiple signatures are required, the

foreign target is described in Regulations

signatures must be provided on a

Line 8. Gain recognition election. If a

section 1.338-2(e)(1).

“SIGNATURE ATTACHMENT” to the form

gain recognition election is made for a

under the appropriate “declaration under

Special Instructions for Foreign

target, it applies to the purchasing

penalties of perjury” (this is the statement

corporation and all members of its

Targets

that appears on Form 8023 immediately

affiliated group that hold nonrecently

Unless otherwise specifically noted, the

above the relevant signature line). Write

purchased target stock (that is, stock in

general rules and requirements in these

“See attached” in the signature area of the

the target acquired prior to the 12-month

instructions apply to foreign targets.

Form 8023.

acquisition period). See Regulations

section 1.338-5(d). If a section 338(h)(10)

A section 338 election will not be valid

election is made for a target, a gain

for a target that is a controlled foreign

Special Instructions for

recognition election is deemed made by

corporation, a passive foreign investment

Foreign Purchasing

each purchasing group member.

company, or a foreign personal holding

Corporations

company unless affected U.S. persons

If a gain recognition election is actually

who own stock in these targets are

made (not deemed made) for a target

Unless otherwise specifically noted, the

notified, in writing, as set forth in

corporation, attach a schedule providing

general rules and requirements in these

Regulations section 1.338-2(e)(4).

the target corporation's name and the

instructions apply to foreign purchasing

name, address, and EIN of each

corporations.

Form 8883. Each U.S. shareholder must

purchasing group member holding

also file Form 8883 with Form 5471. See

Who must file. Generally, the purchasing

nonrecently purchased stock. The

the Instructions for Form 8883.

corporation must file Form 8023.

schedule must also contain the following

However, the U.S. shareholders of

Attachments. Attach a schedule listing

declaration (or a substantially similar

controlled foreign purchasing corporations

the date of each purchase of foreign target

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Instructions For Form 8023 - Elections Under Section 338 For Corporations Making Qualified Stock Purchases Page 3

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