Formulaire 8883 Instructions
Instructions pour le formulaire 8883, État de répartition des biens en vertu de l'article 338
Rév. octobre 2017
Formulaires associés
- Formulaire 8883 - État de répartition des biens en vertu de l'article 338
Department of the Treasury
Internal Revenue Service
Instructions for Form 8883
Asset Allocation Statement Under Section 338
(Rev. October 2017)
Section references are to the Internal Revenue
Code unless otherwise noted.
U.S. Income Tax Return for an S
Corporation.
Elections for Multiple Targets
Under Section 338
Old target (consolidated return). If the
old target is the common parent of a
consolidated group, attach Form 8883 to
its final consolidated return ending on the
acquisition date. If the old target is a
member (not the parent) of a selling group
that will file a consolidated return and is
making a section 338(h)(10) election,
attach the form to the selling group's
consolidated return for its tax year
Although one Form 8023 (rather than
multiple Forms 8023) may be used for
targets that:
General Instructions
Future Developments
Each have the same acquisition date;
Were members of the same affiliated
group immediately before the acquisition
date (defined below); and
For the latest information about
developments related to Form 8883 and
its instructions, such as legislation
enacted after they were published, go to
Are members of the same affiliated
group (defined below) immediately after
the acquisition date, file a separate Form
8883 for each target corporation.
including the acquisition date.
Purpose of Form
However, if an election under section
338(g) is made for the target, attach the
form to the old target's deemed sale
return; not to the selling group's
consolidated return. See Regulations
section 1.338-10(a)(2) through (4) for
details.
Use Form 8883, Asset Allocation
Statement Under Section 338, to report
information about transactions involving
the deemed sale of corporate assets
under section 338. This includes
information previously reported on Form
8023, Elections Under Section 338 for
Corporations Making Qualified Stock
Purchases.
Definitions
A qualified stock purchase (QSP) is the
purchase of stock of at least 80% of the
total voting power and value of the stock
of a corporation by another corporation
during a 12-month period.
New target. Attach Form 8883 to the first
return of the new target. If, on the day after
the acquisition date, the new target is a
member of a group filing a consolidated
return, attach the form to the consolidated
return that includes the day after the
acquisition date.
A 12-month acquisition period is the
12-month period beginning with the first
acquisition by purchase of stock included
in the QSP.
Although you use Form 8023 to make
an election under section 338, you also
must file Form 8883 to supply information
relevant to the election. Timely file Form
8023 even if you do not have all the
information required to be supplied
separately on Form 8883.
The acquisition date is the first date
Foreign target. If a section 338(g)
election is made for a foreign target for
which Form 5471, Information Return of
U.S. Persons With Respect to Certain
Foreign Corporations, must be filed:
The seller (or U.S. shareholder) must
attach a copy of Form 8883 to the last
Form 5471 for the old foreign target.
The purchaser (or its U.S. shareholder)
must attach a copy of Form 8883 to the
first Form 5471 for the new foreign target.
on which a QSP has occurred.
Recently purchased target stock is
any stock in the target corporation that is
held by the purchasing corporation on the
acquisition date and was purchased by
the corporation during the 12-month
acquisition period. See section 338(h)(1)
for special rules for stock acquisitions from
related corporations.
If an election is made under section
338 for a qualified purchase of stock of a
target corporation, the target corporation
(old target) is deemed to sell its assets to
a new corporation (new target) at the
close of the acquisition date. See
Regulations section 1.338-1 for details.
There are two types of section 338
elections. A section 338(g) election is
made only by the purchasing corporation.
A section 338(h)(10) election is made
jointly by both the old target shareholders
and the purchasing corporation. Form
8883 must be used to make both types of
section 338 elections.
An affiliated group is an affiliated
group as defined in section 1504(a),
determined without regard to the
Supplemental Form 8883
If the amount allocated to any asset is
increased or decreased after the year in
which the sale occurs, any affected party
must complete Parts I through IV and VI of
Form 8883 and attach the form to the
income tax return for the year in which the
increase or decrease is taken into
account. See the instructions for Part VI
and Regulations section 1.338-7 for more
information.
exceptions contained in section 1504(b).
A corporation will be treated as a
target affiliate (as defined in section
338(h)(6)) of the target corporation if each
corporation was, at any time during much
of the consistency period that ends on the
acquisition date of the target corporation,
a member of an affiliate group which had
the same common parent. Except as
otherwise provided, a target affiliate does
not include a foreign corporation, a DISC,
or a corporation to which section 936
applies.
Who Must File
For elections under sections 338(g) and
338(h)(10) both the old target and the new
target must file Form 8883.
When and How To File
Penalties
Generally, attach Form 8883 to the return
on which the effects of the section 338
deemed sale and purchase of the target's
assets are required to be reported.
If you do not file a correct Form 8883 by
the due date of your return and you cannot
show reasonable cause, you may be
subject to penalties. See sections 6721
through 6724.
Old target (S corporation for a section
338(h)(10) election). For a section
338(h)(10) election for an S corporation
target, attach Form 8883 to Form 1120S,
Class I assets are cash and general
deposit accounts (including savings and
checking accounts) other than certificates
of deposit held in banks, savings and loan
Oct 26, 2017
Cat. No. 33706N
associations, and other depository
institutions.
Any covenant not to compete entered
into in connection with the acquisition of
an interest in a trade or a business; and
provide the identifying information of the
common parent of the consolidated group
instead of the old or new target. If the old
Any franchise trademark, or trade name or new target is a controlled foreign
Class II assets are actively traded
personal property within the meaning of
section 1092(d)(1) and Regulations
(however, see exception below for certain
corporation (CFC) and does not file a U.S.
income tax return, identify the U.S.
shareholder owning the largest interest in
the CFC (or if the U.S. shareholder is a
member of a consolidated group, the
common parent of that group).
professional sports franchises).
section 1.1092(d)-1 (determined without
regard to section 1092(d)(3)). In addition,
Class II assets include certificates of
deposit and foreign currency even if they
are not actively traded personal property.
Class II assets do not include stock of
target affiliates, whether or not actively
traded, other than actively traded stock
described in section 1504(a)(4). Examples
of Class II assets include U.S. government
securities and publicly traded stock.
The term “section 197 intangible” does
not include any of the following.
An interest in a corporation,
partnership, trust, or estate;
Interests under certain financial
contracts;
Line 2b. Enter the identifying number
(EIN or SSN) of the other party.
Interests in land;
Part III. Target Corporation's
Identifying Information
Certain computer software;
Certain separately acquired interests in
films, sound recordings, video tapes,
books, or other similar property;
Interests under leases of tangible
property;
Complete Part III if the target identifying
information is not provided in Part I (that is,
if Form 8883 is filed by the common parent
of a consolidated group including the
target or by the seller, purchaser, or U.S.
shareholder filing for a foreign target).
Class III assets are assets that the
taxpayer marks-to-market at least annually
for federal income tax purposes and debt
instruments (including accounts
Certain separately acquired rights to
receive tangible property or services;
Certain separately acquired interests in
patents or copyrights;
Line 3b. An EIN is not required if a party
does not have, and is not otherwise
required to have, an EIN.
receivable). However, Class III assets do
not include (a) debt instruments issued by
persons related at the beginning of the
day following the acquisition date to the
target under section 267(b) or 707; (b)
contingent debt instruments subject to
Regulations sections 1.1275-4, and
1.483-4, or section 988, unless the
Interests under indebtedness;
Professional sports franchises acquired
before October 23, 2004; and
Certain transactions costs.
Line 3c. When identifying the country of
incorporation, include political
subdivisions, if any.
See section 197(e) for further information.
Class VII assets are goodwill and
going concern value (whether or not the
goodwill or going concern value qualifies
as a section 197 intangible).
Part IV. General Information
instrument is subject to the noncontingent
bond method of Regulations section
1.1275-4(b) or is described in Regulations
section 1.988-2(b)(2)(i)(B)(2); and (c) debt
instruments convertible into the stock of
the issuer or other property.
Both the old and the new target must
complete lines 4a through 8g.
Line 5a. Enter the consideration paid
(without regard to selling or acquisition
costs) for the recently purchased target
stock (defined earlier). Include only
amounts actually paid to the seller(s) of
the target stock.
Specific Instructions
Part I. Filer's Identifying
Class IV assets are stock in trade of
the taxpayer or other property of a kind
that would properly be included in the
inventory of the taxpayer if on hand at the
close of the taxable year, or property held
by the taxpayer primarily for sale to
customers in the ordinary course of its
trade or business.
Information
Line 5b. New Target: Enter the
acquisition costs, including any other
amounts capitalized in the purchasing
corporation's basis in the recently
purchased target stock.
Old Target: Enter the selling costs of
the selling consolidated group, selling
affiliates, or S corporation shareholder(s)
incurred in connection with the QSP that
reduce the amount realized on the sale of
recently purchased target stock.
Line 1a. Enter the name as shown on
your income tax return.
Line 1b. Enter the corporation's employer
identification number (EIN). If the form is
filed by an individual U.S. shareholder for
a foreign target, enter the shareholder's
social security number (SSN).
Class V assets are all assets other
than Class I, II, III, IV, VI, and VII assets.
Line 1c. Indicate by checking the
applicable box whether you are filing this
form because you are filing the federal
income tax return that reflects the tax
results for the old target of a section 338
election, or because you are filing the
federal income tax return that reflects the
tax results for the new target of a section
338 election. See When and How To File
for a discussion of who files the tax returns
reporting the section 338 results for the
old target and new target, respectively.
Note. Furniture and fixtures, buildings,
land, vehicles, and equipment, which
constitute all or part of a trade or business
as defined in Regulations section
1.1060-1(b)(2) are generally Class V
assets.
Line 5c. Enter the target's liabilities as of
the beginning of the day after the
acquisition date. The old target's liabilities
also are measured as of the beginning of
the day after the acquisition date.
However, see Regulations section
1.338-1(d) regarding certain transactions
on the acquisition date. These liabilities
may include tax consequences resulting
from the deemed sale.
Class VI assets are all section 197
intangibles (as defined in section 197)
except goodwill and going concern value.
Section 197 intangibles include:
Workforce in place;
Part II. Other Party's Identifying
Information
Business books and records, operating
systems, or any other information base,
process, design, pattern, know-how,
formula, or similar item;
Line 5d. New Target: Enter the adjusted
grossed-up basis (AGUB). This is the
amount for which the new target is
deemed to have purchased all of its
assets from the old target. AGUB is the
sum of:
Identify the taxpayer that files the U.S.
income tax return, if any, reflecting the tax
results under section 338 for the other
party to the transaction. If the tax results of
the transaction are reported on a
Any customer-based intangible;
Any supplier-based intangible;
Any license, permit, or other right
granted by a government unit;
consolidated return for the other party,
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The grossed-up basis in the purchasing
corporation's recently purchased target
stock,
subject to any applicable limits under the
Internal Revenue Code or general
principles of tax law.
any remaining consideration to each of the
following classes (Class II, III, etc.). The
number of classes may vary depending on
the year of the acquisition. Increase the
amounts previously allocated to the assets
in each class in proportion to their fair
market values on the purchase date. Do
not allocate to any asset in excess of fair
market value.
If an asset has been disposed of,
depreciated, amortized, or depleted by the
new target before the increase occurs, any
amount allocated to that asset by the new
target must be properly taken into account
under principles of tax law applicable
when part of the cost of an asset (not
previously reflected in its basis) is paid
after the asset has been disposed of,
depreciated, amortized, or depleted.
The purchasing corporation's basis in
nonrecently purchased target stock, and
The liabilities of the new target
(reported on line 5c).
Allocate consideration in Part V as
follows.
1. Reduce the consideration by the
amount of Class I assets.
See Regulations section 1.338-5 for
2. Allocate the remaining
additional information.
consideration to Class II assets, then to
Classes III, IV, V, and VI assets in that
order. For each class, allocate the
remaining consideration to the class
assets in proportion to their FMVs on the
acquisition date (as discussed in the
previous paragraph).
Old Target: Enter the aggregate
deemed sales price (ADSP). This is the
amount for which the old target is deemed
to have sold all of its assets in the deemed
asset sale. ADSP is the sum of:
The grossed-up amount realized on the
sale to the purchasing corporation of the
purchasing corporation's recently
3. Allocate consideration to Class VII
assets.
purchased target stock, and
The liabilities of the old target (reported
on line 5c). Compute ADSP as follows.
If an asset can be included in more
than one class, choose the lower
numbered class (for example, if an asset
could be included in Class III or IV, choose
Class III).
Decreases. Allocate a decrease in
consideration as follows.
1. Enter the amount from line 5a (stock
1. Reduce the amount previously
price)
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allocated to Class VII assets.
2. Divide the amount on line 1 by the
Line 9. For a particular class of assets,
enter the total FMV of all the assets in the
class and the total allocation of the
amount on line 5d, (ADSP or AGUB,
whichever applies) to the class. For
Classes VI and VII, enter the total FMV of
Classes VI and VII combined, and the total
allocation of the amount on line 5d (ADSP
or AGUB, whichever applies) to Classes
VI and VII combined.
2. Reduce the amount previously
allocated to Class VI assets, then to
Classes V, IV, III, and II assets in that
order. Within each class, allocate the
decrease among the class assets in
proportion to their FMVs on the acquisition
date (as discussed under Increases
above).
percentage of target stock (by value,
determined on the acquisition date)
attributable to that recently purchased
target stock
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3. Enter the amount from line 5b (selling
costs)
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4. Grossed-up amount realized on
the sale. Subtract line 3
from line 2
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You cannot decrease the amount
allocated to an asset below zero. If an
asset has a basis of zero at the time the
decrease is taken into account because it
has been disposed of, depreciated,
amortized, or depleted by the new target,
the decrease in consideration allocable to
such asset must be properly taken into
account under the principles of tax law
applicable when the cost of an asset
(previously reflected in basis) is reduced
after the asset has been disposed of,
depreciated, amortized, or depleted. An
asset is considered to have been
5. Enter the amount from line 5c (target
liabilities)
6. ADSP. Add line 5 to line 4. Enter here
and on line 5d
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Part VI. Supplemental
Statement of Assets
Transferred
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For more information see Regulations
section 1.338-4.
Complete Parts I through IV and Part VI
and file a new Form 8883 for each year
that an increase or decrease in AGUB or
ADSP occurs. If an increase or decrease
in the amount to be allocated occurs after
the purchase date, the increase or
Part V. Original Statement of
Assets Transferred
Allocation of consideration. An
decrease must be allocated among the
assets. The reallocation is made in the
taxable year in which the increase or
decrease occurs. Give the reason(s) for
the increase or decrease in allocation.
Also enter the tax year(s) and the form
number of the income tax return with
which the original Form 8883 and any
supplemental Forms 8883 were filed. For
example, enter “2017 Form 1120.”
allocation of ADSP must be made to
determine the old target's gain or loss on
the deemed transfer of each asset, and an
allocation of AGUB must be made to
determine the new target's basis in each
acquired asset. Use the residual method
for making the allocation. The amount
allocated to an asset, other than a Class
VII asset, cannot exceed its fair market
value (FMV) on the acquisition date. For
purposes of this allocation, FMV is the
gross fair market value not reduced by
mortgages, liens, pledges, or other debt.
The amount allocated to an asset also is
disposed of to the extent the decrease
allocated to it would reduce its basis
below zero.
Transitional rules for patents, copy-
rights, and similar property. For
transactions occurring before January 6,
2000, the regulations applied special rules
to the allocation to particular intangible
assets of increases or decreases in
consideration. See the regulations in
effect prior to that time.
Increases. Allocate an increase in
consideration by first allocating the
increase in consideration to Class I and
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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 simpler, we would be
happy to hear from you. You can send us comments through IRS.gov/FormComments. Or write to the Internal Revenue Service, Tax
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