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Ezel / Tax Rulings / CT
CT Ruling 89-46 Corporation Business Tax 1989-08-15

Would Connecticut follow a corporation's federal I.R.C. § 338(h)(10) election when computing corporation business tax?

Short answer: Yes. The Department concluded that Connecticut corporation business tax liability would follow federal law and incorporate the effects of the corporation's I.R.C. § 338(h)(10) election.

Apply this to your situation

This page answers the general question as of 1989. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1989
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1989 Connecticut Department of Revenue Services Ruling addressing federal-conformity treatment of an I.R.C. § 338(h)(10) election for Connecticut corporation business tax under the law then in effect. Federal and Connecticut tax law may have changed, and another corporation should not assume this historical ruling controls a current acquisition or election. This summary is informational only and is not legal or tax advice. Consult licensed federal and Connecticut corporate tax professionals about a specific transaction.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Connecticut would follow federal law and incorporate the effects of a corporation's I.R.C. § 338(h)(10) election when computing Connecticut corporation business tax liability.

What this means for you

The ruling adopted federal treatment of the specified election for the state tax computation. It did not describe the transaction's facts, quantify the tax effects, or address any other federal election.

Because the ruling dates to 1989, current federal and Connecticut conformity rules must be verified for a present transaction.

Common questions

Did Connecticut recognize the federal election? Yes.

What tax did the ruling address? Connecticut corporation business tax.

Did the ruling calculate the tax result? No. It stated that the Department would follow federal law incorporating the election's effects.

Citations and references

  • I.R.C. § 338(h)(10), as cited in the ruling.

Source

Original ruling text

Ruling 89-46, Corporation Business Tax

Ruling 89-46

Corporation Business Tax

You have inquired as to whether a corporation that makes a I.R.C. § 338(h)(10) election will be allowed that treatment for the purposes of the Connecticut Corporation Business Tax.

It is our conclusion that, for the purposes of the Connecticut Corporation Business Tax, this Department will follow federal law incorporating the effects of an I.R.C. § 338(h)(10) election in computing tax liability.

LEGAL DIVISION
August 15, 1989

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