IRC §338(h)(10) Win in California

IRC-338h10-Win-in-CaliforniA new client sold a subsidiary for a $110 million gain, and hired a regional CPA firm to prepare the tax returns to report the §338(h)(10) gain, a transaction in which the sale of stock gets treated as the sale of assets for tax purposes.  The regional firm prepared the California return, reporting a $1 million tax.  The company agreed to Barnwell’s review prior to mailing the state return.

We understood a nuance in California law – that based on a recent General Counsel ruling the company could treat the transaction as the sale of stock.  This resulted in virtually no liability in California for the seller, discovered just in the nick of time and saving the client $1 million.

Learn how we can find tax savings like this for your company. Contact us today for a complimentary consultation.

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In Summary, Barnwell Consulting, LLC can:

  • Find state income/franchise tax refunds and have collected millions of dollars in cash refunds
  • Assist with altering corporate structure when good business purpose exists, to help lower state income tax liabilities
  • Assist with FIN 48 accruals, but more importantly with strategies to resolve FIN 48 uncertainty projects that help companies lower the state effective tax rate.
  • Handle complex income and sales/use tax audits and have been successful in eliminating or reducing material assessments
  • Assist clients with SALT issues in acquisitions and divestitures
  • Identify credits and incentives, which fall into two broad categories, statutory and negotiated. With respect to the former, we see our job less as identifying statutory credits – and more focused on whether our client has fully recognized the credit, and obtained the maximum possible benefit.