medium · Private Equity value-creation

A private equity sponsor acquires an S-corporation for a total enterprise value of $200M. The target has a tax basis in its assets of120M.

If the parties make a Section 338(h)(10) election, what is the new tax basis of the assets acquired by the buyer?

  1. $120M
  2. $320M
  3. $200M
  4. $80M

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