(a) Title 26 U.S.C. §§ 332, 334, 336, 337, and 338, as in effect on January 1, 2007, regarding the liquidations of corporations, are adopted for the purpose of computing Arkansas income tax liability.
(b) However, a corporation that has made an election under Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., and that has not made a corresponding election to be treated as an S Corporation for Arkansas income tax purposes pursuant to § 26-51-409(b), will not be deemed to have made elections under 26 U.S.C. § 338 for Arkansas income tax purposes, unless it has filed a separate election with the Director of the Department of Finance and Administration stating that it is making an election under 26 U.S.C. § 338 for Arkansas income tax purposes.
(c) For the purposes of the application of this section, the transition rule of §§ 633(c) and (d) of the Tax Reform Act of 1986, Pub. L. No. 99-514, as amended by subsections (g)(2), (g)(3)(A)-(C), (g)(4), (g)(5)(A) and (B), and (g)(7) of § 1006 of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. No. 100-647, shall also apply under the state income tax law.
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