# Section 338(h)(10) election

A joint filing that taxes a stock purchase as though it were an asset one.

It is the way out of the fight that stalls more small deals than any other. You want an [asset purchase](https://searchspheresource.com/glossary/asset-vs-stock-sale) for the tax step-up and the clean liability line. The seller wants a stock sale for the single layer of tax. On an [S corporation](https://searchspheresource.com/glossary/entity-type) this election can give you both at once. Buyer and seller file it together, so it is a term you negotiate, and it belongs in the [letter of intent](https://searchspheresource.com/glossary/loi) beside the price. It also moves money: the seller usually pays more tax under it and will ask you to cover the difference. Bring it to your accountant before the letter, not after. The eligibility rules are narrow, and the answer changes the price.

In numbers: A step-up that lets a buyer amortise $1,500,000 of [goodwill](https://searchspheresource.com/glossary/goodwill) over 15 years is worth roughly $100,000 a year of deductions, which is why a seller's tax gross-up request is negotiable rather than absurd.

Source: https://searchspheresource.com/glossary/section-338-election
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt