Form 8023 is how a purchasing corporation makes a section 338 election for a target corporation after a qualified stock purchase (QSP). It treats the stock deal as if the target sold all its assets and bought them back as a new corporation, and it must be filed by the 15th day of the 9th month after the acquisition date.
Everything here comes from the IRS Instructions for Form 8023 (Rev. October 2023) and the October 2023 form, as of October 2026.
Does the deal qualify? The QSP test
A qualified stock purchase is the purchase of at least 80% of the total voting power and value of a corporation's stock by another corporation during a 12-month acquisition period. Preferred stock described in section 1504(a)(4) doesn't count toward voting power or value. The acquisition date is the first day on which the QSP has happened, and that date starts the clock.
| Term | What it means on Form 8023 |
|---|---|
| Qualified stock purchase | At least 80% of voting power and value bought by a corporation within 12 months |
| 12-month acquisition period | Generally the 12 months beginning with the first purchase of stock included in the QSP |
| Acquisition date | The first day the QSP is complete |
| Old target / new target | The target before and after the deemed asset sale |
338(g) or 338(h)(10): what each election does
| Election | Effect | Who files |
|---|---|---|
| Section 338(g) | Target is treated as selling all its assets on the acquisition date and buying them as a new corporation the next day; it recognises gain or loss on the deemed sale | The purchasing corporation |
| Section 338(h)(10) | Target is generally treated as making the deemed sale and then liquidating, with shareholders treated consistently with a sale and liquidation | Jointly: the purchasing corporation and the common parent of the selling consolidated group, the selling affiliate or the S corporation shareholders |
A 338(h)(10) election is only available when the target is bought from a selling consolidated group, a selling affiliate, or S corporation shareholders.
The S corporation rule that stops deals
Here's the line buyers miss. If the target is an S corporation, a 338(h)(10) election must be made by all of the target's shareholders, including shareholders who don't sell stock in the QSP. A minority holder who keeps their shares can still block the election by refusing to sign, so get that signature agreed before closing.
How to file Form 8023
- Work out the acquisition date and diary the 15th day of the 9th month after it.
- Complete Section A-1 for the purchasing corporation, Section A-2 if it's in a consolidated group, Section B for the target and Section C for the seller side.
- Choose the elections in Section E, including the line 8 gain recognition election if it applies.
- Collect every required signature.
- Send it by electronic fax to the toll-free number 844-253-9765, or by post to Internal Revenue Service, OTSA Mail Stop 4916, 1973 Rulon White Blvd., Ogden, UT 84201.
The fax route is only for Form 8023 and its attachments. The cover sheet needs the subject Form 8023, the sender's name, title, phone number and street address, the date and the page count, and must not show an EIN or SSN. A fax can't go over 100 pages.
Several targets on one form
One Form 8023 can cover several targets if each has the same acquisition date, each was in the same affiliated group just before that date, and each is in the same affiliated group just after it. Check the box on line 9 and attach a schedule with the Sections A-1, A-2, B, C and D details and the elections for every extra target.
Lower-tier targets follow a chain rule. If P buys target A, A owns target B and P makes a 338 election for A, that's a deemed QSP of B. To elect for B, complete Form 8023 as if P were B's purchaser.
Foreign targets and extra forms
If the target is or was a controlled foreign corporation, Section C names the U.S. shareholder that owned the largest percentage by value just before the acquisition date, with a schedule for the others. Each U.S. shareholder must also file Form 8883, Asset Allocation Statement Under Section 338, with Form 5471. Foreign purchasing corporations have special timing rules in Regulations section 1.338-2(e)(1).
A few form details trip people up. An EIN is needed for every corporation named in Sections A-1, A-2, B and C, unless it doesn't have and isn't required to have one. A corporation's tax year ending is worked out ignoring the QSP. When giving the country of incorporation, include any political subdivision. If two or more members of the same affiliated but not consolidated group make the QSP, the form must be signed by a person authorized to sign for each corporation.
The October 2023 revision also redesigned the form with 2D barcodes on pages 1 and 2 and a new page 3, so the IRS can read the data digitally and process it faster. Use the current revision rather than an older copy saved from a previous deal.
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The verdict
Treat the 9th month deadline like a closing condition, not a tax-season task. Decide between 338(g) and 338(h)(10) before signing, secure every shareholder signature for an S corporation target, and fax the form with a clean cover sheet so there's a dated record of filing.
Frequently asked questions
What is Form 8023 used for?
It's used to make section 338 elections for a target corporation when the purchasing corporation has made a qualified stock purchase of it.
When is Form 8023 due?
By the 15th day of the 9th month after the acquisition date.
What is a qualified stock purchase?
The purchase of at least 80% of the total voting power and value of a corporation's stock by another corporation during a 12-month acquisition period.
Who signs a section 338(h)(10) election for an S corporation?
All of the S corporation's shareholders, including those who don't sell stock in the QSP, together with the purchasing corporation.
Can I fax Form 8023?
Yes. Fax it toll free to 844-253-9765 with a cover sheet that leaves out your EIN or SSN; faxes can't exceed 100 pages.
Where do I mail Form 8023?
Internal Revenue Service, OTSA Mail Stop 4916, 1973 Rulon White Blvd., Ogden, UT 84201.
What is the line 8 gain recognition election on Form 8023?
It applies to the purchasing corporation and affiliated members holding nonrecently purchased target stock, and is deemed made by each purchasing group member when a 338(h)(10) election is made.
Can one Form 8023 cover several targets?
Yes, if they share an acquisition date and are in the same affiliated group immediately before and after it, with a schedule for each extra target.
