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.
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  • 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.
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