Which of these is a benefit of a stock sale under §338?

A stock sale under §338 allows the buyer to treat the transaction as an asset sale for tax purposes, despite it being a sale of stock. This creates an opportunity for the buyer to step up the tax basis of the acquired assets to their fair market value at the time of the acquisition. The step-up in asset basis leads to increased depreciation and amortization expenses, which can significantly reduce the buyer’s future taxable income. This tax benefit is a major advantage of a stock sale under this section, making it more attractive for buyers looking to maximize their post-acquisition financial position.

The other options present various outcomes of sales that do not align with the benefits of a stock sale under §338. For instance, while immediate cash payment might appeal to some sellers, it is not a specific benefit attributed to the structure of a §338 stock sale; rather, this aspect depends more on the terms negotiated between the buyer and seller. Higher tax liabilities would disincentivize the seller from opting for this method, and increased regulatory oversight does not highlight a specific advantage related to §338 transactions. Thus, the opportunity for tax benefits through asset step-up distinctly makes option B the correct and favorable choice in the context of a §338 stock sale.