You are not short on demand, you are short on clean delivery time. Form 8023 is strict about timing, signatures, and how you coordinate with Form 8883, and if the purchaser is foreign, with Form 5471. The good news is that a disciplined process makes the election straightforward. Below, you get a step by step playbook that you can plug into your workflow, with clear examples and checklists.
Think of Form 8023 as the switch that turns a qualifying stock purchase into a deemed asset acquisition for tax. Get the timing right, get the signatures right, then match your allocation on Form 8883.
Key takeaways
- Use Form 8023 to elect Section 338 treatment so a qualifying stock purchase is treated as a deemed asset sale and repurchase for tax.
- A Qualified Stock Purchase (QSP) happens when you acquire at least 80 percent of voting power and 80 percent of value within 12 months. The first day you hit 80 percent is the acquisition date, which starts the filing clock.
- File by the 15th day of the ninth month after the acquisition date. Late relief exists, but it is limited and not guaranteed.
- Choose 338(g) or 338(h)(10) based on seller profile and tax posture. A 338(h)(10) requires joint signatures, including all S corporation shareholders when the target is an S corp.
- Report your purchase price allocation on Form 8883 using the residual method. Keep names, EINs, dates, and totals aligned with your Form 8023.
- You can file by mail to IRS Ogden or by e‑fax, using a simple cover sheet. Always verify the current address and fax instructions on IRS.gov before filing.
What Form 8023 actually does
You bought stock, but you want tax results that look like an asset purchase. A valid Section 338 election gives you that. The law treats the target as if it sold all assets on the acquisition date, then a new target bought those assets the next day. You get a basis step up or step down to fair value, which drives depreciation, amortization, and future tax attributes. You then report the allocation on Form 8883.
Two flavors, same goal
- Section 338(g) The target recognizes gain or loss at the corporate level on a deemed asset sale. You, as the purchaser, get a fresh asset basis. This is common when the seller is a C corporation or when a joint election is not available.
- Section 338(h)(10) Available when you are buying from a selling consolidated group, a selling affiliate, or S corporation shareholders. The transaction is a deemed asset sale followed by a deemed liquidation to sellers. You still get new basis, but the tax impact shifts to the selling side. This version requires a joint filing with the seller and, for S corporations, every shareholder.
Why firms stumble here
- The acquisition date is the first day the 80 percent threshold is met, not always the closing date. If you reached 80 percent earlier through step purchases or options, that earlier day controls your deadline.
- Missing one S corporation shareholder signature on a 338(h)(10) can invalidate the election.
- Filing 8023 on time, then letting Form 8883 drift or misalign, creates follow up work that slows reviews and rattles clients.
When a disciplined delivery model helps
Most teams do not fail on tax analysis, they fail on the handoffs. A standard intake, clear workpaper names, a short signature matrix, and a weekly status tracker prevent the last minute fire drill. If your staff is buried in compliance, this is the kind of repeating work that benefits from structure. At Accountably, we build SOP driven execution, structured workpapers, and layered QC so partners spend less time in review and more time advising clients. You do not need that support for every election, but it pays off when volume spikes or when foreign disclosure is involved.
Define the Qualified Stock Purchase and fix the acquisition date
A Qualified Stock Purchase (QSP) occurs when a purchasing corporation acquires at least 80 percent of the total voting power and 80 percent of the total value of the target’s stock within a 12 month period. Preferred stock described in section 1504(a)(4) does not count toward the 80 percent test.
The acquisition date is the first day you cross both 80 percent thresholds. That single day sets your Form 8023 filing deadline, your deemed sale day, and the tax years that must reflect Form 8883 allocations.
Close attention to that one date avoids most timing mistakes. Confirm it with cap tables, purchase schedules, and any option exercises.
Track affiliated purchasers and step deals
If multiple members of an affiliated group buy shares, aggregate those acquisitions when testing for a QSP. If more than one group member purchases stock, list on Form 8023 the member that acquired the largest value stake, then attach a schedule for the others.
Options and step acquisitions can move the needle quietly. A small top up that pushes you from 79 percent to 81 percent is the moment your clock starts, even if the closing ceremony happens later.
Milestones at a glance
| Milestone | Trigger | Action |
| 80 percent threshold | Vote and value within 12 months | Fix the acquisition date in a one page memo |
| Filing window | 8.5 months after acquisition date | Calendar the deadline for Form 8023 |
| Group buyers | Largest value purchaser leads | List others on an attached schedule |
| Step acquisitions | Options or later tranches | Reconfirm the first day you crossed 80 percent |
| Foreign purchaser | U.S. shareholder rules may apply | Prepare the signed U.S. shareholder statement |
A quick example you can reuse
- Day 0, you own 79 percent. No QSP yet.
- Day 10, you buy 2 percent more. You now own 81 percent, so Day 10 is the acquisition date.
- Your Form 8023 deadline falls on the 15th day of the ninth month after Day 10. Put it on the calendar that same day.
- Begin collecting signatures immediately if you plan a 338(h)(10) election.
Common acquisition date pitfalls
- Treating the closing date as the acquisition date without checking earlier trades.
- Forgetting that both tests matter, vote and value.
- Missing indirect purchases by affiliates that push you across the line earlier than expected.
- Not documenting the computation, which makes reviews slow and arguments longer.
A 10 minute memo that shows your 80 percent math will save an hour in review and days in a dispute. Keep it simple, show the numbers, and file it in the binder.
Section 338(g), tax effects and filing rhythm
Once you complete a QSP, a Section 338(g) election recharacterizes the deal for tax. The target is deemed to sell all assets on the acquisition date, recognizing gain or loss at the corporate level. You, the purchasing corporation, are deemed to buy those assets the next day, which gives you a fresh basis.
- File Form 8023 by the 15th day of the ninth month after the acquisition date.
- Report the purchase price allocation on Form 8883 under the residual method.
- Expect a basis step up or step down that affects depreciation and amortization schedules for years.
When 338(g) is the practical choice
- The seller cannot, or will not, join a joint election.
- You are buying from a C corporation where seller level stock treatment is not the priority.
- Timing and certainty matter more than seller level allocation outcomes.
Section 338(h)(10), joint election and signature discipline
A Section 338(h)(10) election treats the deal as a deemed asset sale followed by a deemed liquidation to the sellers. It applies only if you buy from a selling consolidated group, a selling affiliate, or S corporation shareholders.
- It is a joint election, so you must collect signatures from the purchaser and the selling side.
- For an S corporation target, every S corporation shareholder must join, including non sellers.
- Missing signatures can invalidate the election, so build a complete signer list on day one.
Which version to choose
| Situation | Likely path | Why it tends to fit |
| Seller is a C corp, no joint path | 338(g) | Purchaser files alone, clear target level tax |
| Seller is an S corp with aligned shareholders | 338(h)(10) | Joint filing, seller level sale and liquidation treatment |
| Consolidated seller parent can coordinate | 338(h)(10) | Centralized seller signature and information flow |
| Timing is tight, seller unresponsive | 338(g) | Fewer signatures, faster process |
Review hints from the field
- Confirm whether the selling side can legally join a joint election before you draft the 338(h)(10) packet.
- Use a single spreadsheet to track signers, capacity, email, and status.
- Put the penalties of perjury language on any SIGNATURE ATTACHMENT so you do not chase form edits later.
Teams rarely lose the technical plot here. They lose time and credibility when signatures arrive late or arrive incomplete. Start signature collection early, and make it easy for signers to execute.
Eligibility limits, definitions, and special rules
A QSP requires at least 80 percent of vote and 80 percent of value within a 12 month period. Do not count preferred described in section 1504(a)(4). The acquisition date is the first day you reach that threshold. That date drives your filing deadline and the tax years for reporting.
Special rules matter in real life deals.
- Lower tier targets If electing for a parent target means a lower tier subsidiary is also a deemed target, you make a separate election for the lower tier as if the direct purchaser of the upper tier were also the purchaser of the lower tier. Follow the same signature and timing rules.
- Affiliated purchasers Aggregate purchases by affiliated group members to test for a QSP. On Form 8023, list the member that acquired the largest value stake, and schedule the others.
- Foreign purchasers If the purchaser is foreign and not otherwise required to file a U.S. return for the year that includes the acquisition date, U.S. shareholders may make the election. A signed statement listing each U.S. shareholder’s details must be attached, and each U.S. shareholder will attach the election to Form 5471 for that year.
Who must file and how joint filings work
The purchasing corporation files Form 8023. For 338(h)(10), treat it as a joint election. You need the purchaser signature and the correct seller signatures.
S corporation signatures you cannot skip
- Every S corporation shareholder must join.
- If an entity signs for a shareholder, show capacity.
- If you run out of space, write See attached and include a signed schedule that repeats the perjury declaration.
Signature requirements and authorized signers
The person signing must be an authorized signer for the entity. If a U.S. individual signs for a corporate purchaser or for an entity shareholder, state authority and sign under penalties of perjury. Keep a short authority memo in the file so reviewers and the IRS can follow the chain if asked.
A simple signature matrix
| Election or fact pattern | Required signers | Practical tip |
| 338(g) | Purchasing corporation | Verify officer title and authority early |
| 338(h)(10), consolidated seller | Purchaser and selling group parent | Start routing well before the deadline |
| 338(h)(10), S corp target | Purchaser and every S shareholder | Use a consolidated SIGNATURE ATTACHMENT |
| Multiple affiliated purchasers | Each non consolidated purchaser | Put the perjury declaration on the attachment |
| Lower tier target | Treat direct purchaser as purchaser for lower tier | Mirror signatures across tiers and cross reference schedules |
Good elections fail more often on signature gaps than on tax rules. Start with a complete list of signers and capacities, then route the packet with clear instructions.
Filing deadline and how to file without drama
You must file Form 8023 by the 15th day of the ninth month after the acquisition date. That is not flexible, so put the deadline on your calendar the day you cross 80 percent.
If you miss the deadline, you may explore late relief under the general extension of time rules. Relief is fact specific and not guaranteed. Treat it as a backup plan, not a strategy.
Where and how to file
You have two common options. You can mail the form to IRS Ogden, OTSA Mail Stop 4916, 1973 Rulon White Blvd., Ogden, UT 84201, or you can submit by electronic fax. Before you file, visit IRS.gov to confirm the current address and e‑fax instructions, since the Service updates intake channels from time to time.
If you fax, include a simple cover sheet that says Form 8023, your name, title, phone number, address, date, and total pages. Do not list EINs or SSNs on the cover sheet. Keep your transmission log, since you will not receive a confirmation.
Pick one method, mail or fax, not both. Duplicate submissions create tracking issues and can delay processing.
Required information and identifiers
You will provide the basics for each listed corporation.
- EIN Enter an Employer Identification Number for each corporation that has, or is required to have, one. If an entity is not required to have an EIN, note that status and keep consistency across attachments.
- Tax year ending Use each corporation’s regular tax year ending, determined without regard to the QSP. Enter month and day accurately.
- Country or state of incorporation For foreign corporations, include the country and political subdivision if applicable. For domestic corporations, list the state of incorporation. Keep formats consistent across the form and any schedules.
- Foreign entity indicators Check the foreign status boxes where applicable, then ensure the jurisdiction information matches.
Foreign purchaser and U.S. shareholder statement
If the purchasing corporation is foreign and the rule set applies, attach a signed U.S. shareholder statement that lists each shareholder’s name, address, identifying number, country of organization, and percentage interest. Coordinate early with the shareholders so each can attach the required materials to Form 5471 for the year that includes the acquisition date.
Foreign purchaser elections add moving parts. Align responsibilities early so you are not chasing signatures and attachments during busy season.
Multiple purchasers and multiple target filings
Complex structures are normal. The form can handle them if you stay organized.
- Multiple affiliated purchasers List in Section A‑1 the purchaser that acquired the largest value stake. Attach schedules for other purchasers with names, classes, percentages, EINs, and tax year endings. Each non consolidated purchaser must sign on the form or on a SIGNATURE ATTACHMENT.
- Multiple targets You can cover multiple targets on a single Form 8023 only when they share the same acquisition date and other conditions are met. Replicate Sections A‑1, A‑2, B, C, and D data per target within the packet, and keep the identifiers aligned. You will still file separate Form 8883 allocations for each target.
- Lower tier targets Treat the election for a lower tier as if the direct purchaser of the upper tier were the purchaser of the lower tier. Mirror the signatures and attach a clear ownership chain schedule.
Controls that keep these filings tidy
| Control point | Why it matters | What to do |
| Single source of truth | Prevents mismatched names and EINs | Keep a master sheet and lock it for edits |
| Signature tracker | Avoids last minute gaps | Capture signer name, capacity, email, status |
| Acquisition date memo | Anchors timing across targets | One page with cap tables and computations |
| Filing method | Prevents duplication | Pick mail or fax, not both |
| Proof of filing | Speeds up any inquiry | Save the fax log or certified mail receipt |
Forms 8883 and 5471 coordination
Once the election is made, Form 8883 reports how you allocate the adjusted deemed sales price and the adjusted grossed up basis by asset class using the residual method. The allocation to any asset, other than Class VII, cannot exceed fair market value on the acquisition date.
When a foreign purchasing corporation is involved and the U.S. shareholder election path applies, each relevant U.S. shareholder attaches Form 8023 and Form 8883 to Form 5471 for the tax year that includes the acquisition date. Build a mini timeline that shows when each filer will attach, then confirm someone is responsible for collecting copies for the deal binder.
Residual method refresher
- Reduce consideration by Class I assets first.
- Allocate sequentially to Classes II through VI based on relative fair value.
- Assign any remainder to Class VII.
- Respect fair value caps for all but Class VII.
Treat the election and the allocation like a single story. If the names, dates, or amounts change between filings, your reviewer will ask why. Consistency buys you time and trust.
Current revision, FAQs, and a simple closing checklist
Form 8023 has kept the same core revision for years, along with barcode intake and an IRS e‑fax channel. Always check IRS.gov/Form8023 for the current revision, address, and fax details before you submit. Keep a copy of the instructions you relied on in your binder with the date you downloaded them.
Frequently asked questions
- What is the deadline for Form 8023 File by the 15th day of the ninth month after the acquisition date. The acquisition date is the first day you cross 80 percent of vote and value within 12 months.
- Who must sign a 338(h)(10) It is a joint election. The purchaser must sign, plus the selling consolidated group’s parent or the selling affiliate. For an S corporation target, all shareholders must sign, including non sellers.
- Can I fax Form 8023 Yes, the IRS has offered an e‑fax channel. Include a simple cover sheet, keep your transmission log, and verify the current fax number on IRS.gov before you send.
- Where do I mail Form 8023 The Office of Tax Shelter Analysis in Ogden processes mailed elections. Verify the OTSA Ogden address on IRS.gov before you ship and keep the certified mail receipt.
- How do I coordinate with Form 8883 Prepare Form 8883 for the year that includes the acquisition date. Match names, EINs, dates, and totals to your Form 8023. Use the residual method and keep valuation workpapers.
- What about foreign purchasers If the purchaser is foreign and the rule applies, U.S. shareholders can make the election. Attach a signed U.S. shareholder statement and ensure each shareholder includes the election and Form 8883 with Form 5471 for the correct year.
Final checklist you can paste into your binder
- QSP verified, 80 percent vote and value within 12 months
- Acquisition date memo prepared with cap tables and step acquisition notes
- Election type selected, 338(g) or 338(h)(10)
- Signers identified, capacities confirmed, SIGNATURE ATTACHMENT prepared if needed
- Filing method selected, mail or e‑fax, not both
- Cover sheet prepared without sensitive identifiers
- Foreign purchaser review completed, U.S. shareholder statement ready if applicable
- Form 8883 drafted, reviewed, and tied to 8023 details
- Proof of filing saved, binder indexed, reviewer sign off captured