Apportionment and Allocation - FAQ

  • What code section and regulation provide guidance in this area?

    Georgia Code Section 48-7-31 and regulation 560-7-7-.03 provide guidance in this area. 


  • Does Georgia recognize Internal Revenue Code Section 338(h)(10) elections by c-corporations and/or s-corporations for state income tax purposes? How would the state treat the gain/loss arising from a section 338(h)(10) election?

    Georgia does recognize the IRC 338(h)(10) election. In this case, the gain on the sale of the stock would not be recognized. Instead, there would be a deemed sale of the assets, which would be reported on the target corporation's return. The income would be apportioned and allocated in the normal manner.