Which of the Following Statements Best Describes a Section 338

question 10

Multiple Choice

Which of the following statements best describes a section 338 transaction?

• A) A section 338 transaction is an election made by the buyer to treat a stock acquisition as an asset acquisition.
• B) A section 338 transaction is an election made by the buyer to treat an asset acquisition as a stock acquisition.
• C) A section 338 transaction is an election made by the seller to treat a stock acquisition as an asset acquisition.
• D) A section 338 transaction is an election made by the seller to treat an asset acquisition as a stock acquisition.

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Definitions:

Indorsements

Signatures or stamps placed on a document (often a financial document) that specify the legal transfer of rights from one party to another.

Unqualified Indorsement

An endorsement on a financial instrument, like a check, that doesn't limit payment to any particular individual or entity.

Indorser

A person who transfers an instrument by signing (indorsing) it and delivering it to another person.

Guaranteeing Payment

The act of promising to fulfill the payment obligations of another party if they fail to pay as agreed.