59-7-115 - Section 336(e), Internal Revenue Code -- Elections.
59-7-115. Section 336(e), Internal Revenue Code -- Elections.
(1) Transactions for which an election has been made for federal purposes under Section336(e), Internal Revenue Code, shall be treated as provided in this section. An election is notavailable for state purposes unless an election is made for federal purposes.
(2) If an election is made under Section 336(e), Internal Revenue Code, the followingshall apply:
(a) if the corporation is treated for federal purposes as having disposed of all of its assetsand is a member of a unitary group immediately preceding the date of sale, the corporation shallbe included in a combined return to the extent of its income through the date of sale, and the gainor loss on the deemed disposal of assets shall be included in the combined income of the unitarygroup;
(b) if the corporation is treated for federal purposes as having disposed of all of its assetsand is not a member of a unitary group immediately preceding the date of sale, the corporationshall file a short period return for the period ending on the date of sale and shall include in suchreturn the gain or loss on the deemed disposal of assets in its adjusted income; and
(c) any gain or loss which is not recognized for federal purposes on stock sold,exchanged, or distributed by a corporation pursuant to Section 336(e), Internal Revenue Code,may not be included in adjusted income.
(3) There is a rebuttable presumption that the gain or loss on the deemed disposition ofassets constitutes business income.
(4) The new basis of assets of the corporation which is treated as having disposed of itsassets shall be the same as determined for federal purposes.
(5) The corporation which is treated as having disposed of its assets shall be treated as anew corporation as of the day after the date of sale.
(6) The commission may prescribe such rules as necessary to provide for the equitabletreatment of any transaction subject to Section 336(e), Internal Revenue Code.
Repealed and Re-enacted by Chapter 169, 1993 General Session