(2) Exception. If an election is conducted in accordance with the provisions of paragraphs 1.1502 to 13 (f)) (5) (ii) (E), the former objective is considered to be liquidated under subsection 1.1502-13 (f) (5) (ii) (C), immediately after the presumed transfer of the assets of the former objective. (iv) The parent joint venture of the consolidated group must provide a copy of the election return referred to in section 336(e) in order to target it to the due date (including extensions) of the consolidated capital gains tax return of the consolidated group. (1) Consolidated Group. Where the seller and the objective are members of the same consolidated group, the election shall be made in accordance with Section 336 (e) by meeting the following requirements: (i) Former purpose – considered as a transfer of assets – (A) In general. This subsection (b) (1) contains the effects of income tax on an election under section 336(e) for a transfer of eligible shares that is not described in whole or in part in section 355(d)(2) or (e)(2). With respect to the federal income tax consequences of an election under section 336(e) with respect to a qualified share transfer, described in whole or in part in section 355(d)(2) or (e)(2), see subsection (b)(2) of this section. Generally, where an election is made under Section 336(e), sellers (or shareholders of S Corporation) are treated as if they had not sold, exchanged or distributed the shares transferred in connection with the sale of eligible shares. Instead, the former purpose is treated as a sale of its assets to an independent person in a single transaction at the end of the assignment (but prior to the presumed liquidation referred to in paragraph (b)(1)(iii) of this Section, in exchange for the aggregate accepted asset transfer price (ADADP) in accordance with paragraphs 1.336 to 3. ADADP is allocated to the assets at the date of disposal in the same way that the aggregate selling price (ADSP) is allocated in accordance with paragraphs 1.338-6 and 1.338-7 to determine the amount realized from each of the assets sold. Old Target realizes the alleged sales tax consequences of the alleged assignment order before the sale date, while the former Target is owned by the seller or shareholders of S Corporation.
If the former objective is a S-Corporation objective, the choice of the former objective will remain in effect until the end of the date of the transfer (including the date of the deemed disposal of the asset and the presumed liquidation), notwithstanding section 1362(d)(2)(B). If the former objective is an objective of S-Corporation (but not a subsidiary qualified as sub-chapter S), all subsidiaries, direct or indirect, of the former objective that treated the former objective as subsidiaries qualified as sub-chapter S in accordance with section 1361 (b) (3), remain until the end of the date of disposal of the qualified subsidiaries of sub-chapter S. . . .