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Form 8883: Asset Allocation Statement Under Section 338
IRS Form 8883 is the Asset Allocation Statement Under Section 338, used to report transactions involving deemed sales of corporate assets. If using this form for a section 338 election, it must be attached to the first Form 5471 for the new foreign target.
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IRS Form 8883 - Asset Allocation Statement Under Section 338
IRS Form 8883 is the Asset Allocation Statement Under Section 338, used to report transactions involving deemed sales of corporate assets. If using this form for a section 338 election, it must be attached to the first Form 5471 for the new foreign target.
Risk Radar
Scan points- 1Failure to file a correct Form 8883 by the due date without reasonable cause risks penalties under IRS sections 6721-6724.
- 2Failing to attach Form 8883 to the first Form 5471 when filing for a new foreign target.
- 3Not completing Parts I through IV and VI when an asset allocation amount changes after the sale year.
- 4Omitting identifying information in Part II if the filer is not one of the targets themselves.
- 5Failing to enter the correct consideration paid on line 5a (without regard to selling/acquisition costs).
Plain English
This form tells the IRS how assets were divided when one company was deemed to sell its assets to another during an acquisition under Section 338. It is required even if you already filed Form 8023 to make that election. Filing this supplies necessary details related to the corporate asset sale.
Submission Date
- Filing date: 2017-10-31 18:00:14
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when reporting transactions involving a deemed sale of corporate assets under section 338, which includes information previously reported on Form 8023.
- Do not use it when an election under section 338 has been made but the necessary asset allocation details are being supplied via other means (though filing both is required).
- Check Form 8023 instead when making the initial election under section 338, as Form 8883 supplies relevant information to that election.
Form selector
Use this form or another form?
Old target is an S corporation electing 338(h)(10)
The form must be attached to the U.S. Income Tax Return for the S Corporation
✓ Risk of filing on the wrong return type.
Old target is part of a consolidated group (member, not parent) making 338(h)(10) election
Ensures correct grouping reporting.
✓ Check attachment instructions carefully.
Attach to selling group's consolidated return for its tax year including acquisition date
Deadline or filing window
The form must accompany the income tax return for the year that an asset allocation change occurs. If supplemental filing is required, this must be done when the increase or decrease is taken into account. The instructions reference 'When and How To File' for specific due dates.
Checklist
What you need before filling it out
Part I Filer’s Identifying Information
Name (1a), ID Number (1b) · Form 8883
Old target/New target selection (1c)
Check applicable box on Part I · Form 8883
Was a valid and timely Form 8023 filed? (1d)
Check applicable box on Part I · Form 8883
Asset Allocation Amount (Part II, Line 2b)
Sum of assets acquired by the new target from the old target · Form 8883
Foreign Target Filing Requirement
Copy of Form 8883 must be attached to the last Form 5471 for the old foreign target (Seller/U.S. Shareholder) · Form 5471
Before you submit
- 1Confirm that Part I identifies the correct Filer's Name and Identifying Number.
- 2Verify which box in Part I, Line 1c is checked (Old target or New target).
- 3Confirm that Part I, Line 1d verifies a valid and timely Form 8023 was filed.
- 4Ensure Part II, Line 2b correctly lists the AGUB amount for which the new target purchased assets from the old target.
- 5If filing for a foreign target, confirm this form accompanies the requisite Form 5471 (if applicable).
- 6Attach Form 8883 to the correct tax return based on entity type and election (e.g., attach to Form 1120S if S corp electing 338(h)(10)).
- 7If filing for a consolidated group, ensure attachment is made to the appropriate consolidated return.
How to file this form
- 1Determine whether the filer is the old target or new target and check the corresponding box in Part I, Line 1c of Form 8883.
- 2Complete Part I by providing the Name (1a) and Identifying Number (1b) as shown on the relevant tax return.
- 3Check Part I, Line 1d to confirm a valid and timely Form 8023 was filed regarding the section 338 election.
- 4Calculate and enter the Asset Allocation Amount (AGUB) in Part II, Line 2b, representing what the new target deemed purchased from the old target.
- 5Attach Form 8883 to the specific tax return dictated by entity type (e.g., attach to the first return of the new target or the final consolidated return of the old target).
- 6If filing for a foreign target, ensure the seller/U.S. shareholder attaches this copy to the last Form 5471 for the old foreign target.
- 7Keep a copy of the completed and attached Form 8883 for your records.
Known limitations
- 1Form 8883 must be used to make both a section 338(g) election (made by the purchasing corporation) and a section 338(h)(10) election (made jointly by old target shareholders and the purchasing corporation).
- 2If an asset's allocation increases or decreases after the initial sale year, only Parts I through IV and VI of Form 8883 must be completed for that affected party.
- 3When filing supplemental Forms 8883 due to a change in asset allocation, the reallocation is made in the taxable year when the increase or decrease occurs.
- 4If multiple targets share the same acquisition date, one Form 8023 may be used instead of multiple Forms 8023 for those targets.
- 5A target affiliate does not include a foreign corporation, a DISC, or a corporation to which section 936 applies, unless otherwise provided.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
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Fillable formOpen in Editor->The current edition is dated October 2017 (Rev.). The instructions direct users to IRS.gov/Form8883 for the latest information regarding developments related to Form 8883.
What changed or needs a fresh check
- Edition date — confirm the revision date reads October 2017
- Fee — Not stated in the official source
- Mailing address — Do not send to IRS Tax Forms and Publications Division (1111 Constitution Ave. NW, IR-6526, Washington, DC 20224); see 'When and How To File' for correct attachment instructions.
- Signature — Not explicitly stated where the signature must be placed on Form 8883 itself, but it is implied as part of filing.
Quick Facts
Downloads
After you file
- 1Attach a copy of Form 8883 to the first Form 5471 when filing for the new foreign target.
- 2Keep a copy of the completed Form 8883 on file with your income tax return.
- 3If an asset allocation changes after the sale, attach the supplemental Form 8883 to the income tax return for the year the change is accounted for.
- 4When filing supplemental Forms 8883, record the tax year(s) and form number of the original Form 8883 on the supplement (e.g., “2017 Form 1120”).
- 5If a penalty may apply due to late or incorrect filing, review IRS sections 6721 through 6724 for details.
- 6Submit comments regarding time estimates or simplicity suggestions to the Internal Revenue Service at 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224 (do not send Form 8883 to this address).
Sources
- SRCInstructions p.1 — Purpose of Form 8883 is to report information about transactions involving deemed sale of corporate assets under section 338.
- SRCInstructions p.1 — Both old target and new target must file Form 8883 for elections under sections 338(g) and 338(h)(10).
- SRCInstructions p.1 — A shareholder must attach a copy of Form 8883 to the first Form 5471 for the new foreign target.
- SRCInstructions p.1 — If allocation changes, affected party completes Parts I through IV and VI of Form 8883 and attaches it to the income tax return for the year change is taken into account.
- SRCForm p.1 — The form must be attached to your income tax return.
- SRCInstructions p.4 — Estimated burden for business taxpayers filing this form is approved under OMB control number 1545-0123.
Common confusion points
Who must file Form 8883?
Both the old target and the new target must file Form 8883 for elections under sections 338(g) and 338(h)(10).
→ Check Part I, lines 1c (Old target/New target).
What happens if you don't have all the info to fill out Form 8883?
File Form 8023 timely even if information for Form 8883 is missing.
→ Confirm filing Form 8023 before submitting Form 8883.
How do you handle a change in asset allocation after the sale date?
Complete Parts I through IV and VI of Form 8883, attach it to the income tax return for the year the change occurs.
→ Look at Instructions p.1 regarding supplemental filings.
What is the order when increasing an asset's allocation?
Allocate the increase in consideration first to Class I assets, then allocate any remainder proportionally to Classes II, III, etc., based on fair market value on purchase date.
→ Review instructions for Part III (Increases).
When should you attach Form 8883 if it is a supplemental filing?
Attach the form to the income tax return for the year in which the increase or decrease is taken into account.
→ Check Instructions p.1 regarding timing.
What if your company has multiple targets that acquired on the same date?
One Form 8023 may be used instead of multiple Forms 8023.
→ Verify this condition under "Elections for Multiple Targets Under Section 338" in Instructions p.1.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Penalties are referenced by sections 6721 through 6724 of the Internal Revenue Code.
Questions about IRS Form 8883
What is IRS Form 8883 used for?
This form tells the IRS how assets were divided when one company was deemed to sell its assets to another during an acquisition under Section 338. It is required even if you already filed Form 8023 to make that election. Filing this supplies necessary details related to the corporate asset sale.
Who must file IRS Form 8883?
Both the old target and the new target must file IRS Form 8883 for elections made under sections 338(g) and 338(h)(10), respectively.
What information does IRS Form 8883 require?
The form collects information in several parts, including Part I (Filer’s Identifying Information), Part II (Other Party’s Identifying Information), Part III (Target Corporation's Identifying Information), and Part IV (General Information). Specific details include the acquisition date on line 4a and the consideration paid on line 5a.
When is IRS Form 8883 due?
The form must be attached to the income tax return for the year in which an increase or decrease in asset allocation is taken into account, if a supplemental filing is necessary. General timing instructions refer to 'When and How To File' (see [Instructions p.2]).
Where do I file IRS Form 8883?
The instructions direct filers to go to IRS.gov/Form8883 for specific routing information regarding where the form should be sent.
How do I complete IRS Form 8883?
The filer must complete Part I first with their identifying information. Then, they provide details for the other party in Part II, followed by target corporation data in Part III. Finally, all parties complete Part IV with general transaction information before attaching it to the tax return.
What happens if IRS Form 8883 is filed incorrectly?
If a correct Form 8883 is not filed by the due date of the return and reasonable cause cannot be shown, the filer may be subject to penalties under sections 6721 through 6724.
Who must file Form 8883?
Both the old target and the new target must file Form 8883 for elections under sections 338(g) and 338(h)(10). Check Part I, lines 1c (Old target/New target).
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