W. Eugene Seago (Virginia Tech University, Pamplin College of Business) & Reza Barkhi (Virginia Tech University, Pamplin College of Business) have published In the Process of Preventing Triple Taxation of a Subsidiary’s Income, Congress Created a Great Indoor Game, 109 Tax Notes 1081 (Nov. 21, 2005), also available on the Tax Analysts web site as Doc 2005-22788, 2005 TNT 224-39.  Here is the abstract:

Seago and Barkhi analyze the § 338(h)(10) election to treat a parent’s sale of a subsidiary as a sale of the subsidiary’s assets. Because the buyer and the parent must enter into the election, the buyer is able to share in the relief from the triple taxation of the subsidiary’s income that accrued while the parent owned the subsidiary. Further, by permitting the parent to make the election, instead of a joint election with the buyer, the parent could capture all of the relief from the triple taxation of the subsidiary’s appreciation in value. The joint election enhances the tax benefits of the election, at the cost of government revenues, while reducing the parent’s share of those benefits.