(1) A taxpayer who becomes a member of a water's-edge group, subsequent to an election by the group, will be deemed to have elected and will be bound by the election. Procedures provided in ARM 42.26.302 for renewal of a water's-edge election would apply.

(2) If a water's-edge taxpayer is purchased or otherwise acquired by an entity not subject to tax under 15-31-101, MCA, and whose parent and affiliates are not subject to tax under 15-31-101, MCA, the water's-edge election carries over to each member of the new affiliated group.

(3) If a water's-edge taxpayer is purchased or otherwise acquired by a non-water's-edge taxpayer, who is subject to tax under 15-31-101, MCA, the water's-edge election will be terminated as of the purchase date.

(4) If a water's-edge taxpayer is a party to reorganization, and as a result ceases to exist, the water's-edge election will be terminated as of the date of the reorganization.

(5) If a water's-edge taxpayer is a party to a reorganization, and survives the reorganization, the water's-edge election carries over to the new affiliated group. Procedures provided for in ARM 42.26.302 for renewal of a water's-edge election would apply.

(6) If a nonwater's-edge taxpayer is purchased or otherwise acquired by an entity not subject to tax under 15-31-101, MCA, and whose parent and affiliates are not subject to tax under 15-31-101, MCA, the taxpayer may make a valid water's-edge election as provided for in ARM 42.26.302. The taxpayer must complete Form WE – ELECT and file the form with the department within the first 90 days after the purchase or acquisition date.

(7) If a nonwater's-edge taxpayer who did not previously own greater than 50 percent of an entity incorporated outside the United States purchases or otherwise acquires an entity incorporated outside the United States, the taxpayer may make a valid water's-edge election as provided for in ARM 42.26.302. The taxpayer must complete Form WE – ELECT and file the form with the department within the first 90 days after the acquisition date.