(1)  Transactions for which an election has been made or considered to be made for federal purposes under Section 338, Internal Revenue Code, shall be treated as provided in this section. An election is not available for state purposes unless an election is made or considered to be made for federal purposes.

Terms Used In Utah Code 59-7-114

  • Adjusted income: means unadjusted income as modified by Sections 59-7-105 and 59-7-106. See Utah Code 59-7-101
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Business income: means the same as that term is defined in Section 59-7-302. See Utah Code 59-7-101
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: includes :
(a) entities defined as corporations under Sections 7701(a) and 7704, Internal Revenue Code; and
(b) other organizations that are taxed as corporations for federal income tax purposes under the Internal Revenue Code. See Utah Code 59-7-101
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Income: includes losses. See Utah Code 59-7-101
  • Internal Revenue Code: means Title 26 of the United States Code as effective during the year in which Utah taxable income is determined. See Utah Code 59-7-101
  • return: includes a combined report. See Utah Code 59-7-101
  • State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
  • taxable year: includes the period for which such return is made. See Utah Code 59-7-101
  • Unitary group: includes a captive real estate investment trust. See Utah Code 59-7-101
    • (2)  If an election is made or considered to be made for federal purposes under Section 338, Internal Revenue Code, other than under Subsection 338(h)(10):

    (a)  the target corporation shall file a separate entity one-day tax return for state purposes, as is required for federal purposes, and shall include in such return the gain or loss on the deemed sale of assets in its adjusted income;

    (b)  the gain or loss on the deemed sale of assets shall be apportioned to this state using the apportionment fraction of the target corporation calculated on a separate entity basis for the most recent preceding taxable year consisting of 180 days or more; and

    (c)  the due date of the one-day return shall be the same as the due date of the return which includes the taxable period of the target corporation which immediately precedes the one-day return.

    (3)  If an election is made for federal purposes under Subsection 338(h)(10), Internal Revenue Code, the following shall apply:

    (a)  if the target corporation is a member of a unitary group immediately preceding the acquisition date, the target corporation shall be included in a combined return to the extent of its income through the acquisition date, and the gain or loss on the deemed sale of assets shall be included in the combined income of the unitary group;

    (b)  if the target corporation is not a member of a unitary group immediately preceding the acquisition date, the target corporation shall file a short period return for the period ending on the acquisition date and shall include in such return the gain or loss on the deemed sale of assets in its adjusted income; and

    (c)  any gain or loss which is not recognized for federal purposes on stock sold or exchanged by a member of a selling consolidated group as defined in Section 338, Internal Revenue Code, may not be included in the adjusted income of the selling corporation.

    (4)  There is a rebuttable presumption that the gain or loss on the deemed sale of assets constitutes business income.

    (5)  The new basis of the target corporation’s assets shall be determined under Section 338, Internal Revenue Code.

    (6)  The target corporation shall be treated as a new corporation as of the day after the acquisition date.

    (7)  The commission may prescribe such rules as necessary to provide for the equitable treatment of any transaction subject to Section 338, Internal Revenue Code.

    Amended by Chapter 9, 2001 General Session

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