department of the treasury employer_identification_number contact person - id number contact telephone number uil internal_revenue_service p o box cincinnati oh date number release date legend w location x quantity y dollars amount z quantity dear you asked for advance approval of your scholarship grant procedures under sec_4945 this approval is required because you are a private_foundation that is exempt from federal_income_tax you requested approval of your scholarship program to fund the education of certain qualifying students our determination we approved your procedures for awarding scholarships based on the information you submitted and assuming you will conduct your program as proposed we determined that your procedures for awarding scholarships meet the requirements of code sec_4945 as a result expenditures you make under these procedures will not be taxable also awards made under these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified_tuition_and_related_expenses subject_to the limitations in code sec_117 description of your request your letter indicates you are operating a scholarship program to students in w to further your purpose of enhancing access to higher education scholarships are granted for high school trade school college university or graduate school assistance the number of students eligible to apply is generally in the range of z individuals letter catalog number 58263t you are required to annually distribute the greater of the net_income of the trust or the amount that must be distributed to satisfy code sec_4942 so the number of scholarships distributed will vary depending on the amount of funds available to be distributed it's estimated that you will award x scholarships in the range y dollars scholarships are not renewable and are made on a one-time basis in addition all scholarships are awarded on an objective and non-discriminatory basis and no scholarship may be awarded to any disqualified_person as defined in code sec_4946 to promote your scholarship program you will annually notify school counselors in w of the scholarships available these counselors also will provide students with scholarship information which is also available on several of the schools websites in order to apply an applicant must submit the scholarship application requiring detailed biographical information a financial statement detailing assets and liabilities of both the parents and the applicant as well as a copy of both the parent's and the applicant's individual federal_income_tax return a current grade transcript a resume a written letter of application containing the following information a statement the applicant is applying for the scholarship what use the applicant will make of the scholarship what the applicant's long range goals are why the scholarship is needed why the applicant feels worthy of the scholarship how past records have shown promise of the applicant being able to carry out future plans and anything else the scholarship committee should know the selection committee also known as the scholarship advisory committee is made up of the acting superintendents of each of the public high schools located in w as outlined in your trust agreement furthermore your trust agreement states that the committee's decisions are absolutely final provided the committee abides by the following general instructions each applicant must be a boy or girl and resident of w scholarships are granted for high school college trade school university or graduate school assistance scholarship payments may be made to defray such expenses as tuition books and other educational expenses while the committee may give consideration to whatever factors it deems appropriate substantial consideration should be given to the financial need of the applicant the scholarship committee reviews the scholarship applications and ranks the applicants based on grade-point-average financial need and their resume financial need is determined through the financial statement of all assets and liabilities from the student letter catalog number 58263t and parent s of the student financial need is then confirmed if the financial statement proves the family does not have sufficient resources available for school each year your trustee advises the committee of the amount of funds available for scholarships after the committee members review and rank the applications the committee then submits the recipient information to your trustee for distribution as well as advises you regarding the amount that should be awarded to each recipient you will pay the scholarship proceeds directly to the school that the recipient will attend for the benefit of the recipient you will also provide a letter to each school specifying the school's acceptance of the funds which constitutes the school's agreement to refund any unused portion of the scholarship if a scholarship recipient fails to meet any term or condition of the scholarship in addition the school is to notify you if the scholarship recipient fails to meet any term or condition of the scholarship if the school will not agree to such terms the school is to return the check and you will obtain proof of enrollment and a grade transcript from the student you will do this by sending a grant letter to the recipient to sign in order to acknowledge individual expenditure_responsibility before any check is mailed to the student if the student does not sign the agreement and provide proof of enrollment the scholarship will not be awarded you maintain all records relating to individual grants including information obtained to evaluate grantees identify whether a grantee is a disqualified_person establish the amount and purpose of each grant and establish that you undertook the supervision and investigation of grants awarded basis for our determination the law imposes certain excise_taxes on the taxable_expenditures of private_foundations code sec_4945 a taxable_expenditure is any amount a private_foundation pays as a grant to an individual for travel study or other similar purposes however a grant that meets all of the following requirements of code sec_4945 is not a taxable_expenditure the foundation awards the grant on an objective and nondiscriminatory basis the irs approves in advance the procedure for awarding the grant the grant is a scholarship or fellowship subject_to the provisions of code sec_117 the grant is to be used for study at an educational_organization described in code sec_170 a ii letter catalog number 58263t other conditions that apply to this determination this determination only covers the grant program described above this approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request this determination applies only to you it may not be cited as a precedent you cannot rely on the conclusions in this letter if the facts you provided have changed substantially you may report any significant changes to your program by completing form_8940 and sending it to the cincinnati office of exempt_organizations at internal_revenue_service exempt_organizations determinations p o box cincinnati oh you cannot award grants to your creators officers directors trustees foundation managers or members of selection committees or their relatives all funds distributed to individuals must be made on a charitable basis and further the purposes of your organization you cannot award grants for a purpose that is inconsistent with code sec_170 you should keep adequate_records and case histories so that you can substantiate your grant distributions with the irs if necessary please keep a copy of this letter in your records if you have questions please contact the person listed at the top of this letter sincerely director exempt_organizations letter catalog number 58263t


2uvu822028 department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division feb uniform issue list t p 8a t4 legend taxpayer a credit_union b amount c amount d amount e employee f date g date h date ira x dear this is in response to your request dated date for a waiver of the 60-day rollover requirement contained in sec_408 of the intemal revenue code the code the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a age represents that he received a distribution from ira x totaling amount c of amount c amount e was a required_minimum_distribution taxpayer a asserts that his failure to accomplish a rollover of amount d amount c less amount e within the 60-day period prescribed by sec_408 d of the code was due to an error by employee f of credit_union b which led to amount d being placed in a non-ira account with credit_union b taxpayer a represents that amount d has not been used for any other purpose and remains in credit_union b taxpayer a maintained two accounts ira x and a non-ira certificate of deposit with credit_union b on date g taxpayer a visited credit_union b and spoke with employee f who advised taxpayer a to reinvest ira x in another cd in order to obtain the best rate of retum offered by credit_union b in addition taxpayer a's non-ira cd at credit_union b also matured at the same time as the cd in ira x employee f stated that taxpayer a could combine his required_minimum_distribution amount e with the renewal of taxpayer a's non-ira cd into a single non-ira cd taxpayer a signed the paperwork supplied by employee f that he believed authorized the establishment of a non-ira cd account and an ira cd account and left credit_union b with the understanding that the transactions would be carried out by credit_union b as described to him by employee f however employee f combined all of taxpayer a's funds into one non-ira certificate of deposit on date h taxpayer a had his federal income taxes prepared and discovered employee f’s error in causing a distribution from ira x of amount d and the failure to transfer amount d to another ira cd as taxpayer a intended taxpayer a met with employee f and she admitted making a mistake in the above- described transactions on date based on the above facts and representations you request that the service waive the 60-day rollover requirement with respect to the distribution of amount d sec_408 of the code provides that except as otherwise provided in sec_408 any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408a of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if i the entire amount received including money or any other_property i is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or ii the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 sec_408 of the code provides that sec_408 d does not apply to any amount described in sec_408 a i received by an individual from an ra if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 from an ira which was not includible in gross_income because of the application of sec_408 sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 3xe of the code provides that the rollover provisions of sec_408 do not apply to any amount required to be distributed under sec_408 sec_408 of the code provides that the secretary_of_the_treasury may waive the 60-day requirement under sec_408 and d of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 r b provides that in determining whether to grant a waiver of the 60-day rollover requirement ‘pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information and documentation submitted by taxpayer a is consistent with his assertion that his failure to accomplish a rollover within the 60-day period prescribed by sec_408 of the code was due to an error by credit_union b which led to amount d being placed in a non- ra account instead of being transferred to a rollover ira with credit_union b therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount d taxpayer a is granted a period of 60-days from the issuance of this ruling letter to contribute amount d into a rollover ira provided all other requirements of sec_408 of the code except the 60-day rollover requirement are met with respect to such contribution amount d will be considered a rollover_contribution within the meaning of sec_408 of the code please note that pursuant to sec_408 e of the code this ruling does not authorize the rollover of code sec_401 minimum required distributions no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations that may be applicable hereto this ruling is directed solely to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent lf you have any questions regarding this ruling you may contact at sincerely yours denett dh v donzell littlejohn employee_plans technical group manager enclosures notice of intention to disclose deleted copy of this letter


internal_revenue_service number release date index number ----------------------- ------------------------ ------------------------------------- ----------------------- ------------------------------ department of the treasury washington dc third party communication date of communication month dd yyyy person to contact ------------------ id no ----------------- telephone number ------------------- refer reply to cc tege eoeg eo2 plr-115468-18 date date legend organization -------------------------------------- state residents members subsistence ------------- ----------- -------------------------------------------------------------------------------------------- ------------------------------------------------------------ dear ---------------- this letter responds to your letter from your authorized representative dated date and subsequent correspondence submitted on behalf of organization facts organization is recognized by the internal_revenue_service as a tax-exempt_organization described in i r c sec_501 and exempt from federal_income_tax under sec_501 of the internal_revenue_code it is a religious residential community located in state organization is inspired by christian ideals and structured around many daily religious observances as well as celebrations of festivals of the christian the internal_revenue_code_of_1986 as amended to which all subsequent i r c references are made unless otherwise indicated plr-115468-18 year it adheres to the tenets of ----------------------- however organization is not under the control and supervision of a church_or_convention_or_association_of_churches organization lives out the ideals and worldview of -------------------- through its dedication to the care and well-being of adults with developmental disabilities residents in its residential community the community also includes members who care for residents and the members’ children the residents members and members’ children live together full-time in extended family households and work together maintaining the community members are those individuals who have been in continuous residence at the organization’s facility for at least three years have completed a prescribed course of studies in -------------------- have completed a discernment process within the organization regarding the suitability of their intended permanent commitment to the community and have been accepted into an intended permanent residence in the community members agree to strive to live out of ideals requiring moral and spiritual self-sacrifice and dedication to the goals of the organization at the expense of their material well-being members live and work full-time at the organization’s facility they are devoted full-time to the fulfillment of organization’s spiritual and religious goals members pledge to faithfully abide by the ideals of the organization and are held to that standard common and private prayer reading of christian scriptures in light of ---------------------- interpretations the bible evening offering service and celebration of christian festivals are integral to the lives of members the members’ caring for residents is the organization’s core religious objective subsistence is provided by the organization to members without cost to the members and without regard to their economic contribution to the community in practice this includes meals lodging clothing the use of automobiles costs of travel and medical insurance members are also given a modest annual cash allotment for three-to-four week vacations outside the community in the case of members who have school-aged children organization covers the cost of education at two local private_schools with a philosophy similar to that of the organization in the case of members with college-aged children the organization provides such members with an annual sum to offer partial aid in support of the college expenses of such children issue sec_1 whether the organization is a religious_order described in revproc_91_20 1991_1_cb_524 whether the organization’s members are members of a religious_order as described in revproc_91_20 plr-115468-18 whether subsistence constitutes wages for purposes of sec_3121 sec_3306 and sec_3401 ruling requests number and number law and analysis the term religious_order is not defined in the code or regulations organizations and individuals may request rulings from the service on whether they are religious orders or members of a religious_order by following the procedures in revproc_91_20 revproc_91_20 states that the service will use these characteristics as set forth below in determining whether an organization is a religious_order and whether an individual is a member of a religious_order the organization is described in sec_501 of the code the members of the organization vow to live under a strict set of rules requiring moral and spiritual self-sacrifice and dedication to the goals of the organization at the expense of their material well-being the members of the organization after successful completion of the organization’s training program and probationary period make a long-term commitment to the organization normally more than two years the organization is directly or indirectly under the control and supervision of a church_or_convention_or_association_of_churches or is significantly funded by a church_or_convention_or_association_of_churches the members of the organization normally live together as part of a community and are held to a significantly stricter level of moral and religious discipline than that required of lay church members the members of the organization work or serve full-time on behalf of the religious educational or charitable goals of the organization the members of the organization participate regularly in activities such as public or private prayer religious study teaching care of the aging missionary work or church reform or renewal generally the presence of all the above characteristics is determinative that the organization is a religious_order on the other hand the absence of the characteristic that the organization is an organization described in sec_50l c is determinative plr-115468-18 that the organization is not a religious_order the absence of one or more of the other enumerated characteristics is not necessarily determinative in a particular case with respect to the characteristics set forth in revproc_91_20 organization does not satisfy characteristic number the organization is not either directly or indirectly under the control and supervision of a church or a convention or association of churches and is not significantly funded by a single church_or_convention_or_association_of_churches the organization satisfies the other characteristics in revproc_91_20 for a religious_order and the members satisfy the other characteristics in revproc_91_20 for members of a religious_order accordingly based on our consideration of all the facts and circumstances we conclude that organization is a religious_order and that the members are members of such religious_order ruling_request number law and analysis taxes under the federal_insurance_contributions_act fica apply to remuneration for employment as defined in sec_3121 sec_3121 excepts from employment for fica tax purposes service performed by a member of a religious_order in the exercise of duties required by such order in this case we have determined that organization is a religious_order and that members are members of such religious_order the services performed by members for organization are duties that are required by organization’s community accordingly pursuant to sec_3121 the subsistence earned by members for services performed by them as members of organization a religious_order does not constitute wages subject_to fica_taxes sec_3401 provides that the term wages for income_tax_withholding purposes means all remuneration for services performed by an employee for his employer with certain exceptions sec_3401 excepts from the definition of wages for income_tax_withholding purposes remuneration for services performed by a member of a religious_order in the exercise of duties required by such order consequently pursuant to sec_3401 the subsistence earned by members for services performed by them as members of organization a religious_order does not constitute wages subject_to federal_income_tax withholding sec_3306 provides that the term wages for purposes of the taxes imposed under the federal unemployment_compensation act futa means all remuneration for employment with certain exceptions sec_3306 excepts from the definition of employment for futa_tax purposes any service performed in the plr-115468-18 employ of a religious charitable educational or other organization described in sec_501 that is exempt from federal_income_tax under sec_501 therefore because organization is described in sec_501 and is exempt from federal_income_tax under sec_501 pursuant to sec_3306 the subsistence earned by members for services performed by them as members of organization a religious_order is not subject_to futa_tax this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination sincerely taina e edlund senior technician reviewer tax exempt government entities enclosure


internal_revenue_service number release date index number ---------------------- ----------------------- ------------------ ----------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------- id no ---------------- telephone number -------------------- refer reply to cc fip b01 plr-132639-18 date date legend fund -------------------------------------------------------------------------------------------------- -------------------------------------------------------- state ------------------ year ------ dear -------------------- this responds to a letter dated date submitted on behalf of fund fund requests consent to revoke for year and subsequent years an election made by fund under sec_4982 of the internal_revenue_code code facts fund is a common_law trust organized under the laws of state fund is registered with the securities_and_exchange_commission as a non-diversified open-end management investment_company under the investment_company act of u s c 80a-1 et seq as amended fund has made an election under sec_851 of the code to be a regulated_investment_company ric fund’s overall_method_of_accounting is an accrual_method and its taxable_year is the calendar_year fund has previously elected under sec_4982 to compute its capital_gain_net_income for purposes of sec_4982 and e using its taxable_year in lieu of the one-year period ending october of the calendar_year at the time fund originally made the election under sec_4982 fund assumed that the election would relieve the administrative burden associated with plr-132639-18 separate calculations for excise_tax and income_tax purposes of fund’s capital_gain_net_income mark-to-market gains and losses and specified gains and losses or the predecessor foreign_currency gains and losses and sec_1296 gains and losses however fund’s experience has been that the election has created additional administrative complexities primarily due to time constraints in declaring dividends at least equal to the required_distribution under sec_4982 accordingly fund seeks consent to revoke its election under sec_4982 fund makes the following representations fund’s desire to revoke its election is due to administrative and non-tax-related financial burdens caused by the election fund is not seeking to revoke its election in order to preserve or secure a tax_benefit fund will neither benefit through hindsight nor prejudice the interests of the government if permitted to revoke its election and fund will not make a subsequent election under sec_4982 for at least five calendar years following year law and analysis sec_4982 imposes an excise_tax on every ric subject_to certain exceptions for each calendar_year equal to percent of the excess if any of the required_distribution over the distributed_amount for the calendar_year sec_4982 defines the term required_distribution to mean with respect to any calendar_year the sum of a percent of the ric’s ordinary_income for such calendar_year as defined in sec_4982 plus b percent of its capital_gain_net_income for the one-year period ending on october of such calendar_year sec_4982 provides that if the taxable_year of a ric ends with the month of november or december the ric may elect to have its taxable_year taken into account in lieu of the one-year period ending on october of the calendar_year for purposes of satisfying the required_distribution defined in sec_4982 sec_4982 provides that such election once made may be revoked only with the consent of the secretary sec_4982 provides that any specified_gain or specified_loss that would be properly taken into account for the portion of the calendar_year after october shall be treated as arising on january of the following calendar_year sec_4982 defines specified_gain and specified_loss as ordinary gain_or_loss from plr-132639-18 the sale exchange or other_disposition of property including the termination of a position with respect to such property the terms include any foreign_currency_gain_or_loss attributable to a sec_988 transaction and any amount includible in gross_income under sec_1296 or allowable as a deduction under sec_1296 sec_4982 provides that if a ric makes an election under sec_4982 sec_4982 applies by substituting the last day of the ric’s taxable_year for october sec_4982 provides that for the purposes of determining a ric’s ordinary_income each specified mark-to-market provision shall be applied as if such ric’s taxable_year ended on october sec_4982 also provides that in the case of a ric making an election under sec_4982 the preceding sentence shall be applied by substituting the last day of the ric’s taxable_year for october sec_4982 defines specified_mark_to_market_provision as sec_1256 and sec_1296 and any other provision of the code or regulations thereunder that treats property as disposed of on the last day of the taxable_year or that determines income by reference to the value of an item on the last day of the taxable_year if a calendar_year ric revokes an election under sec_4982 the months of november and december of the last calendar_year to which the election applies are part of both a that calendar_year and b the one-year period ending on october of the first calendar_year to which the election does not apply if capital_gains_and_losses arising in those two months were included for two calendar years however sec_4982 would not function as intended conclusion based on the information submitted and the representations made pursuant to sec_4982 the secretary consents to the revocation for year and subsequent years of the election made by fund under sec_4982 in addition for purposes of sec_4982 and e fund’s capital_gain_net_income for year will be determined for the period beginning on january year and ending on october year as a condition to secretary’s consent to the revocation pursuant to sec_4982 fund may not make a subsequent election under sec_4982 for a period of calendar years following year except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter including whether fund qualifies as a ric this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited as precedent plr-132639-18 in accordance with the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative a copy of this letter must be attached to any federal income or excise_tax returns filed by fund for the year to which this ruling applies sincerely _________________________ steven harrison branch chief branch office of associate chief_counsel financial institutions and products


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi plr-127237-02 date date legend x a b state d1 dear this letter responds to your letter dated date on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code facts x was incorporated under state law on d1 x's shareholders a and b decided that x would be an s_corporation effective d1 the shareholders relied upon a tax adviser to file x's form_2553 election by a small_business_corporation however x's form_2553 was not filed timely x requests a ruling under sec_1362 that its sec_1362 election will be treated as timely made for its taxable_year that began on d1 law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective generally if an s election is made within the first two and one-half months of a plr-127237-02 corporation’s taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made sec_1362 provides that if an s election is made after the first two and one-half months of a corporation’s taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made sec_1362 provides that if an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making the election for the taxable_year or no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make the election then the secretary may treat the election as timely made for such taxable_year and sec_1362 shall not apply conclusion based on the facts submitted and representations made we conclude that x has established reasonable_cause for failing to make a timely s election and that x is eligible for relief under sec_1362 accordingly if x makes an election to be an s_corporation by filing with the appropriate service_center a completed form_2553 containing an effective date of d1 for the election within days following the date of this letter then such election will be treated as timely made a copy of this letter should be attached to the form_2553 filed with the service_center a copy is enclosed for that purpose except as expressly provided herein we express or imply no opinion concerning the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically we express or imply no opinion concerning whether x is an s_corporation for federal tax purposes pursuant to a power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent sincerely mary beth collins senior technician reviewer branch office of the associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service number release date index number ------------------------------------- --------------------- ------------------------------------ -------------------------------- - department of the treasury washington dc person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 - plr-142482-05 date date ----------------------------- ein ---------------- ---------------------- ---------------------- legend legend llc d1 a dear ------------- this responds to your letter dated date and subsequent correspondence submitted on behalf of llc requesting an extension under ' of the procedure and administration regulations for llc to elect to be treated as an association_taxable_as_a_corporation for federal tax purposes and relief to file a late s_corporation_election under sec_1362 of the internal_revenue_code the information submitted states that llc is a limited_liability_company formed on d1 a a member of llc represents that llc was intended to be an s_corporation for federal tax purposes effective d1 however a form_2553 election by a small_business_corporation was not filed timely for llc additionally a form_8832 entity classification election was not filed timely for llc sec_301_7701-3 provides that a business_entity that is not classified as a corporation under ' b or an eligible_entity can elect its classification for federal tax purposes a business_entity is any entity recognized for federal tax purposes that is not properly classified as a_trust under ' or otherwise subject_to special treatment under the internal_revenue_code sec_301_7701-2 an eligible_entity with at least two members can elect plr-142482-05 either to be classified as an association and thus a corporation under ' b or a partnership sec_301_7701-3 provides that an eligible_entity with at least two owners will be classified as a partnership unless it elects otherwise sec_301_7701-3 provides that to elect to be classified other than as provided in ' b an eligible_entity must file form_8832 with the designated service_center sec_301_7701-3 provides that an election will be effective on the date specified on the form_8832 or on the date filed if no such date is specified the effective date specified on the form_8832 cannot be more than days prior to the date the election is filed under c the commissioner may grant a reasonable extension of sec_301_9100-1 and sec_301_9100-3 provide the standards the commissioner will sec_301_9100-3 provides that requests for relief under ' will be time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or an announcement published in the internal_revenue_bulletin use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of ' granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election as an s_corporation is made within the first two and one-half months of a corporation’s taxable_year then that corporation will be treated as an s_corporation for the year in which the election sec_1362 provides that a small_business_corporation can elect to be treated sec_1362 provides when an s election becomes effective if an s election sec_301_9100-3 provides that a taxpayer is deemed to have acted sec_1362 provides that if -- a an election under sec_1362 is made for plr-142482-05 was made if an election is made after the first two and one-half months of a corporation’s taxable_year then the corporation will generally not be treated as an s_corporation until the following taxable_year any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make such election the secretary may treat such an election as timely made for such taxable_year based solely on the facts submitted and representations made we conclude that the requirements of ' have been satisfied as a result llc is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center electing under ' c to be classified as an association taxable as corporation for federal tax purposes effective d1 a copy of this letter should be attached to the form_8832 make a timely election to be an s_corporation effective d1 accordingly provided that llc makes an election to be an s_corporation by filing a completed form_2553 with the appropriate service_center effective d1 within days following the date of this letter then such election will be treated as timely made for llc effective d1 a copy of this letter should be attached to the form_2553 concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter including whether llc was or is a small_business_corporation under sec_1361 the internal_revenue_code provides that it may not be used or cited as precedent is being sent to llc’s authorized representative additionally we conclude that llc has established reasonable_cause for failing to in accordance with a power_of_attorney on file with this office a copy of this letter this ruling is directed only to the taxpayer requesting it sec_6110 of except as expressly provided herein no opinion is expressed or implied sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures cc copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury index number u i l no washington dc number release date legend person to contact telephone number refer reply to cc dom p si plr-120254-98 date date company state shareholders a b dear this letter responds to a letter dated date requesting a ruling on behalf of company under sec_1362 of the internal_revenue_code the information submitted discloses that company was incorporated on a in state company has two shareholders shareholders it is represented that company has intended to be an s_corporation since the beginning of its first taxable_year believing itself to be an s_corporation company has operated accordingly after the end of its first taxable_year however company discovered that its s election had not been timely filed company requests a ruling that its sec_1362 election will be treated as timely made for its taxable_year that begins on b plr-120254-98 sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 explains when an s election will be effective generally if an s election is made within the first two and one half months of a corporation’s taxable_year then that corporation will be treated as an s_corporation for the year in which the election is made sec_1362 provides that if an s election is made after the first two and one half months of a corporation’s taxable_year then that corporation will not be treated as an s_corporation until the taxable_year following the year in which the s election is made sec_1362 provides that if no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and sec_1362 shall not apply applying the relevant law to the facts submitted and representations made we rule that company's sec_1362 election will be treated as timely made for its taxable_year that begins on b however this ruling is contingent on company filing form_2553 election by a small_business_corporation with an effective date of b with the appropriate service_center within days from the date of this ruling a copy of this letter should be attached to the form_2553 except as specifically set forth above we express no opinion concerning the federal tax consequences of the foregoing facts specifically we express no opinion on whether company otherwise qualifies as an s_corporation plr-120254-98 this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely yours jeff erickson assistant to the chief branch office of the assistant chief_counsel passthroughs and special industries enclosure copy for sec_6110 purposes


t c summary opinion united_states tax_court karl v meier petitioner v commissioner of internal revenue respondent docket no 5212-01s filed date karl v meier pro_se frank w louis for respondent pajak special_trial_judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect at the time the petition was filed the decision to be entered is not reviewable by any other court and this opinion should not be cited as authority unless otherwise indicated subseguent section references are to the internal_revenue_code in effect for the year in issue and all rule references are to the tax_court rules_of_practice and procedure - - respondent determined a deficiency in petitioner’s federal_income_tax in the amount of dollar_figure this court must decide whether petitioner is entitled to dependency_exemption deductions for his two children whether petitioner is entitled to head_of_household filing_status and whether petitioner is entitled to the earned_income_credit some of the facts in this case have been stipulated and are so found petitioner resided in hobart new york at the time he filed his petition during karl v meier petitioner was employed as a cook he reported wages of dollar_figure on his federal_income_tax return petitioner has two children kaislyn meier kaislyn and naleah meier naleah with his former wife nancy meier ms meier on date petitioner was divorced from ms meier by a judgment of divorce from the supreme court of the state of new york county of delaware divorce decree a proceeding was held in connection with the divorce and the proceeding was incorporated into the divorce decree the divorce decree provided that the parties have agreed to joint physical custody of the children the custody arrangement generally provided that petitioner and ms meier would alternate custody of both children on a weekly basis special arrangements were - - provided for certain holidays birthdays and vacations the custody arrangement also provided that petitioner and ms meier agreed to waive paying each other child_support on his federal_income_tax return petitioner claimed kaislyn and naleah as dependents petitioner filed as head_of_household for the taxable_year he also claimed both children for purposes of the earned_income_credit respondent determined that for the taxable_year petitioner was not entitled to claim kaislyn and naleah as dependents that his filing_status was single rather than head_of_household and that he was not entitled to the earned_income_credit taxpayers generally bear the burden of proving that the commissioner’s determination is incorrect rule a 290_us_111 sec_7491 does not apply in this case to place the burden_of_proof on respondent because petitioner neither alleged that sec_7491 was applicable nor established that he fully complied with the substantiation requirements of sec_7491 a a sec_151 allows a taxpayer to deduct an annual exemption_amount for each dependent as defined in sec_152 sec_152 provides in pertinent part that a dependent includes an individual such as a son or daughter over one-half of whose support in the taxable_year was from the taxpayer or is - treated as received from the taxpayer under sec_152 sec_152 provides special rules for a child whose parents are either divorced or who live apart at all times for the last months of the calendar_year in those situations the statute provides that if a child receives over one-half of his or her support from his or her parents and if the child is in the custody of one or both of his or her parents for more than one- half of the calendar_year then the child is treated for purposes of sec_152 as receiving over one-half of his or her support during the year from the parent having custody for a greater portion of the calendar_year sec_152 as is relevant here custody is determined by the terms of the most recent decree of divorce or separate_maintenance agreement or subsequent custody decree sec_1_152-4 income_tax regs in the event of so-called split custody custody will be deemed to be with the parent who as between both parents has the physical custody of the child for the greater portion of the calendar_year sec_1_152-4 income_tax regs petitioner and ms meier generally followed the divorce decree and split equally the custody of the two children there is no question but that petitioner and ms meier provided percent of the support of the two children however petitioner repeatedly was asked by ms meier to keep the children beyond the allotted time so that he had custody during periods ms meier - - should have had custody he was asked to care for the children when doctor or dentist appointments were required or when they were sick during periods when they should have been in the custody of ms meier in essence petitioner had custody for the weeks he was to have custody under the decree plus he had custody of the children for some of the weeks ms meier was supposed to take care of them we are convinced on this record that petitioner had custody of the children for the greater portion of under sec_152 and sec_1_152-4 income_tax regs the children are treated as having received over one-half of their support from petitioner accordingly we hold that petitioner is entitled under sec_151l a and e to claim kaislyn and naleah as dependents for we next consider whether petitioner is entitled to head_of_household filing_status for respondent determined that petitioner’s proper filing_status for the taxable_year at issue is single sec_2 in relevant part defines head_of_household as an unmarried taxpayer who maintains as his home a household which constitutes for more than one-half of such taxable_year the principal_place_of_abode of a person who is an unmarried son or daughter of the taxpayer sec_2 a we have found that petitioner had physical custody of kaislyn and naleah for the greater portion of accordingly we hold that - - petitioner is entitled to head_of_household filing_status for the taxable_year in issue finally we must consider whether petitioner may claim an earned_income_credit under sec_32 in the amount of dollar_figure for respondent disallowed the earned_income_credit on the basis that the two children did not reside with petitioner for more than one-half of as we have found above the children resided with petitioner for more than one-half of accordingly we hold that petitioner is entitled to the claimed earned_income_credit under sec_32 reviewed and adopted as the report of the small_tax_case division decision will be entered for petitioner


internal_revenue_service number release date index number ------------------- -------------------- ---------------------------------- ---------------------------- ----------------------------- legend department of the treasury washington dc person to contact ----------------------- id no --------------- telephone number --------------------- refer reply to cc intl - plr-159915-02 date november ------------- -------------------- ------------------------ ----------------------------------- -------------------------------------------------- taxpayer --------------------------------------------------------------- entity tax_year sec_1 in-house tax manager outside tax advisor dear ------------- this replies to a letter dated date in which taxpayer requests an extension of time under sec_301_9100-3 to file an agreement described in sec_1_1503-2 for each dual_consolidated_loss incurred by entity in tax_year sec_1 and and to file a separate annual certification described in sec_1_1503-2 for tax_year sec_2 and with respect to the dual_consolidated_loss incurred in the previous taxable_year or years the information submitted for consideration is substantially as set forth below the ruling contained in this letter is predicated upon facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as a part of the audit process in re plr-159915-02 the affidavits of the in-house tax manager and the outside tax advisor and the facts submitted describe the circumstances that led to the discovery that taxpayer failed to file the agreements and annual certifications for the tax years at issue the affidavits and facts indicate that the outside tax advisor did not advise the in-house tax manager of the requirements to file the agreements and annual certifications because the outside tax advisor was not aware of the dual_consolidated_loss rules or the requirements to file the agreements and annual certifications sec_301 -1 b provides that an election includes an application_for relief in respect of tax and defines a regulatory election as an election whose due_date is prescribed by a regulation a revenue_ruling revenue_procedure notice or announcement sec_301_9100-1 provides that the commissioner has discretion to grant a taxpayer a reasonable extension of time under the rules set forth in sec_301_9100-3 to make a regulatory election under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government in the present situation the agreement and annual certification described in sec_1 g are each a regulatory election as defined in sec_301_9100-1 therefore the commissioner has discretionary authority under sec_301_9100-1 to grant taxpayer an extension of time provided that taxpayer satisfies the rules set forth in sec_301_9100-3 based on the facts and information submitted we conclude that taxpayer satisfies sec_301_9100-3 accordingly taxpayer is granted an extension of time of days from the date of this ruling letter to file an agreement described in sec_1_1503-2 for each dual_consolidated_loss incurred by entity in tax_year sec_1 and and to file a separate annual certification described in sec_1_1503-2 for tax_year sec_2 and with respect to the dual_consolidated_loss incurred in the previous taxable_year or years the granting of an extension of time is not a determination that taxpayer is otherwise eligible to file the agreements and annual certifications sec_301_9100-1 a copy of this ruling letter should be associated with the agreements and annual certifications in re plr-159915-02 this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent no ruling has been requested and none is expressed as to the application of any other section of the code or regulations to the facts presented pursuant to a power_of_attorney on file in this office a copy of this ruling letter is being furnished to your authorized representatives sincerely associate chief_counsel international by allen goldstein reviewer enclosure copy for purposes


tax_exempt_and_government_entities_division number release date date date department of the treasury internal_revenue_service washington d c contact person identification_number telephone number employer_identification_number uil egend i u i z l o z j u o a o w dear this is in response to your request dated date for certain rulings as to the federal_income_tax consequences of a proposed sale of real_property facts you are exempt from federal_income_tax under sec_501 of the internal_revenue_code code and you are classified as an organization described in sec_509 and sec_170 of the code you were created as a charitable_trust under the will of n to establish and support o for education of the people of p you currently educate large numbers of individuals annually it was n’s desire that you maintain the bequest of real_property intact selling property only when it was absolutely necessary you still own most of the original bequest from n your assets include property held for both charitable and non-charitable purposes property held for non-charitable purposes includes income-producing real_property and securities held to provide for the continued maintenance and support for your charitable activities at the end of your most recent fiscal_year your income was insufficient to fund your educational programs requiring you to tap your reserve fund defer planned capital improvements and repairs and reduce overall administrative costs to make-up for this shortfall a state authority that monitors your activities has recommended that you review and evaluate the advantages and disadvantages of diversification of your extensive real_property holdings in light of your mission and goals as such you have identified a total of eight commercial real_estate parcels that you propose to liquidate m is one of the eight parcels you have identified for liquidation m is the only parcel that is the subject of this ruling_request and any ruling rendered herein only pertains to m and not to any other parcel that may be discussed throughout this ruling m was acquired as part of a settlement of litigation and you have held it for several decades m is a parcel of land substantially_all of which is leased to commercial tenants although m is improved the improvements were present when m was acquired you have neither made any improvements to m nor do you intend to make any improvements to m with m being sold on an as-is basis you intend to offer m for sale by utilizing the services of a real_estate broker after you execute a listing agreement with the broker the broker would market m to potential purchasers which might include one or more of the current tenants of m ultimately a formal purchase and sale agreement would be executed the agreement would be based on standardized form term sheets and agreements all sales will be cash sales as you would neither offer a purchase- money mortgage nor accept an installment-sales contract all sales will be on an as-is basis and will not be sold to a party related to you you will not repurchase m in the future furthermore potential buyers must agree that all sales terms are subject_to final approval by your trustees so as to verify sales are in accordance with both your tax-exempt purpose and the recommendations of the state authority that monitors your activities although m is the subject of this ruling you plan to liquidate a total of eight parcels of commercial real_property including m to meet your educational funding requirements and asset diversification goals you intend to liquidate all eight parcels within the next year the size frequency and continuity of your total projected sales consisting of the eight parcels including m will be considered in this ruling only as to the affect they have upon the liquidation of m this ruling does not address how the remaining seven sales will be treated under the code you may choose to request a ruling or rulings with respect to the remaining sales at a later time rulings requested your sale of m will not affect your status as an organization described in sec_501 of the code your sale of m will not be treated as a sale of property_held_primarily_for_sale to customer sec_2 in the ordinary course of a trade_or_business within the meaning of sec_512 of the code and as such the sale proceeds will not be subject_to the tax on unrelated_business_taxable_income law sec_501 of the code generally provides an exemption from federal income_taxation for any organization described in sec_501 of the code sec_501 of the code provides in part for the exemption of organizations that are organized and operated exclusively for educational_purposes no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 of the treasury regulations regulations states that for an organization to be exempt under sec_501 it must be operated exclusively for one or more of the purposes specified in such section sec_1_501_c_3_-1 of the regulations provides that an organization will be regarded it engages primarily in activities which as operated exclusively for an exempt_purpose only if accomplish one or more of such exempt purposes specified in sec_501 of the code an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose sec_1_501_c_3_-1 of the regulations provides in part that an organization may meet the requirements of sec_501 although it operates a trade_or_business as a substantial part of its activities if the operation of such trade_or_business is in furtherance of the organization’s exempt_purpose and if the organization is not organized or operated for the primary purpose of carrying on an unrelated_trade_or_business as defined in sec_513 sec_511 of the code imposes a tax on the unrelated_business_taxable_income of certain tax-exempt organizations including charitable and educational organizations described in sec_501 sec_512 of the code defines unrelated_business_taxable_income as the gross_income derived by any organization from any unrelated_trade_or_business as defined in sec_513 regularly carried on by it less allowable deductions directly connected with the carrying on of such trade_or_business both computed with the modifications provided in sec_512 sec_512 of the code excludes from the computation of unrelated_business_taxable_income all gains or losses from the sale exchange or other_disposition of property other than a stock_in_trade or other_property of a kind which would properly be includible in inventory if on hand at the close of the taxable_year or b property_held_primarily_for_sale to customers in the ordinary course of the trade_or_business revrul_55_449 1955_2_cb_599 holds that the construction and sale of houses by a foundation otherwise exempt under sec_501 of the code over a period of months for the sole purpose of raising funds for the support of a church constituted an unrelated_trade_or_business within the meaning of sec_513 because construction and sale of houses is a business of a kind ordinarily carried on for profit revrul_59_91 1959_1_cb_215 holds that where a taxpayer engages in extensive land development activities such as lot subdivision installation of utilities and paving streets all in order to facilitate the sale and derive the maximum proceeds from the disposition of the property the taxpayer is holding property for sale to customers in the ordinary course of trade_or_business in 143_f2d_468 5th cir the taxpayer owned acres of unimproved land used for grazing purposes to facilitate the sale of land the taxpayer subdivided the land into lots built streets installed storm sewers constructed gas and electric lines and undertook other activities of the kind usually carried out by a real_estate development company each year to lots were sold the court held that taxpayer was holding lots for sale to customers in the regular course of business in 7_tc_198 the taxpayer purchased platted land to use in his nursery business twelve years later the city built streets through the property that made it less useful for his business even though he made no active sales effort and made no improvements he sold and a half lots in one year the court opined that the sales were essentially made in the nature of a gradual and passive liquidation of an asset and not in the ordinary course of a trade_or_business in 383_us_569 86_sct_1030 the supreme court defined the standard to be applied in determining whether property is held primarily_for_sale_to_customers in the ordinary course of business the court interpreted the word primarily to mean of first importance or principally by this standard ordinary_income would not result unless a sales purpose is dominant in 195_f2d_714 the taxpayer initially purchased land not for resale to customers but throughout the years subdivided the land and resold parcels sporadically primarily as the market dictated the court indicated that the taxpayer engaged in continuous sales and concluded that the property was held primarily_for_sale_to_customers as part of the taxpayer’s business the court stated that t here is no fixed formula or rule_of thumb for determining whether property sold by the taxpayer was held by him primarily_for_sale_to_customers in the ordinary_course_of_his_trade_or_business each case must in the last analysis rest upon its own facts there are a number of helpful factors however to point the way among which are the purposes for which the property was acquired whether for sale or investment and continuity and frequency of sales as opposed to isolated transactions in 60_tc_996 acq in result c b the tax_court held that a taxpayer who purchased parcels and sold parcels of undeveloped land over four years was not engaged in the trade_or_business of buying and selling land for purposes of sec_1221 of the code the taxpayer utilized brokers to aid him in disposing of some of the land however neither the taxpayer nor the brokers ever sought out or solicited prospective buyers or advertised the properties for sale the court analyzed the following factors to determine that the taxpayer was not engaged in the operation of the trade_or_business of buying and selling land the purpose for which the property was acquired the frequency continuity and size of the sales the activities of the owner in the improvement and disposition of the property the extent of improvements made to the property the proximity of sale to purchase and the purpose for which the property was held in adam and subsequent cases courts have found that no one of these factors is controlling but all are relevant to consider in determining whether the sale of property occurred in the regular course of a taxpayer’s trade_or_business analysis the issue in this case is whether the sale of m will be treated as a sale of property_held_primarily_for_sale to customers in the ordinary course of a trade_or_business within the meaning of sec_512 of the code whether real_property is held primarily_for_sale_to_customers in the ordinary course of an organization’s trade_or_business is a facts and circumstances determination see mauldin v commissioner supra and adam v commissioner supra in malat v riddell supra the court interpreted the meaning of the word primarily to mean of first importance or principally you received m in a settlement agreement many years ago you have held m for a long period as an income-producing asset to fund your charitable activities however a state authority that monitors your activities has recommended that you review and evaluate the advantages and disadvantages of diversification of your extensive real_property holdings in light of your mission and goals due to an increased need for educational funding and asset diversification for long-term asset stabilization you desire to liquidate m the time span between the acquisition of m and its projected sale is several decades the long duration you held m and its initial receipt in a settlement agreement are not typical characteristics of a taxpayer holding property primarily_for_sale_to_customers in the ordinary course of its trade_or_business m is a parcel of land substantially_all of which is leased to commercial’tenants although m is improved the improvements were present when you acquired m with m sold by you on an as is basis as such you have not performed nor plan to perform any development or improvement activities pertaining to m with respect to your activities in marketing m your efforts will be restricted to utilizing a broker to offer m for sale to other parties and to negotiate the sale on your behalf under a standard offers and terms agreement thus your activities with respect to marketing m will be limited we also consider the frequency continuity and size of sales when determining whether an organization is holding property primarily_for_sale_to_customers in the ordinary course of a trade_or_business your ruling_request pertains only to the sale of m if considered in isolation the sale of m could not be considered frequent or continuous because it is a one-time sale however because you intend to liquidate a total of eight parcels including m we must consider the entire group of eight parcels when considering the frequency continuity and size of your projected total sales and how they affect the liquidation of m nevertheless this ruling does not address how the remaining seven sales will be treated under the code your facts are distinguishable from those in revrul_55_449 supra in which a foundation constructed and sold houses over a period of months for the sole purpose of raising funds to support a church they are also distinguishable from the facts in brown v commissioner supra in which a taxpayer subdivided and developed property for the purpose of selling the property then sold lots in both of these cases the taxpayers’ efforts in acquiring and developing the properties for sale suggested that they were holding the property primarily_for_sale_to_customers in the ordinary course of a trade_or_business in contrast you propose to liquidate one property out of a total of eight this property was received as part of a settlement has been held for a very long time and you plan to sell the property with no development or improvement activities and with minimal marketing activities accordingly under the primary purpose test of malat v riddell supra and the facts_and_circumstances_test of adam v commissioner supra we conclude that you do not hold your interests in m primarily_for_sale_to_customers in the ordinary course of a trade_or_business therefore your sale of m will not generate unrelated_business_taxable_income under sec_511 and sec_512 of the code and will not adversely affect your exempt status under sec_501 conclusion your sale of m will not affect your status as an organization described in sec_501 of the code your sale of m will not be treated as a sale of property_held_primarily_for_sale to customer sec_2 in the ordinary course of a trade_or_business within the meaning of sec_512 of the code and as such the sale proceeds will not be subject_to the tax on unrelated_business_taxable_income however this ruling does not address the issue as to whether your sale of any additional parcels of real_property other than m will be treated as a sale of property_held_primarily_for_sale to customers in the ordinary course of a trade_or_business within the meaning of sec_512 of the code this ruling will be made available for public inspection under sec_6110 of the code after certain deletions of identifying information are made for details see enclosed notice notice of intention to disclose a copy of this ruling with deletions that we intend to make available for public inspection is attached to notice if you disagree with our proposed deletions you should follow the instructions in notice code provides that it may not be used or cited by others as precedent this ruling is directed only to the organization that requested it sec_6110 of the there will be no material changes in these facts this ruling does not address the applicability of any section of the code or regulations to the facts submitted other than with respect to the sections described because it could help resolve questions concerning your federal_income_tax status this ruling should be kept in your permanent records if you have any questions about this ruling please contact the person whose name and this ruling is based on the facts as they were presented and on the understanding that telephone number are shown in the heading of this letter in accordance with the power_of_attorney currently on file with the internal_revenue_service we are sending a copy of this letter to your authorized representative sincerely theodore r lieber manager exempt_organizations technical group enclosure notice


internal_revenue_service number release date index number --------------------------------------------------- --------------------------- ------------------------------- --------------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------------------------------------- -------------------------------------- telephone number ---------------------- refer reply to cc psi b04 plr-130165-16 date date legend decedent spouse date date dear ------ -------------- ---------------------------------------------------- -------------------------------------- -------------------------- -------------------------- this letter responds to your personal representative’s letter of date requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election under sec_2010 of the internal_revenue_code code a portability election to allow a decedent’s surviving_spouse to take into account that decedent’s deceased spousal unused exclusion dsue amount the facts and representations submitted are summarized as follows decedent died on date survived by spouse date is a date after the effective date of the amendment to sec_2010 to provide for portability of a dsue amount to a surviving_spouse to obtain the benefit of portability of decedent’s dsue amount to spouse decedent’s estate was required to file form_706 united_states estate and generation-skipping_transfer_tax return on or before the date that is nine months after decedent’s date of death or the last day of the period covered by an extension decedent’s form_706 was due on date but the estate did not file a form_706 to make the portability election the estate discovered its failure to elect portability after the due_date for making the election plr-130165-16 spouse served as executor of decedent’s estate spouse represents that the value of decedent’s gross_estate is less than the basic exclusion amount in the year of decedent’s death and that during his lifetime decedent made no taxable_gifts as executor spouse requests an extension of time pursuant to sec_301_9100-3 to elect portability of decedent’s dsue amount pursuant to sec_2010 law and analysis sec_2001 imposes a tax on the transfer of the taxable_estate of every decedent who is a citizen or resident_of_the_united_states sec_2010 provides that a credit of the applicable credit_amount shall be allowed to the estate of every decedent against the tax imposed by sec_2001 sec_2010 provides that the applicable credit_amount is the amount of the tentative_tax that would be determined under sec_2001 if the amount with respect to which such tentative_tax is to be computed were equal to the applicable_exclusion_amount on date congress amended sec_2010 effective for estates of decedents dying and gifts made after date to allow portability of a decedent’s unused applicable_exclusion_amount between spouses tax relief unemployment insurance reauthorization and job creation act of pub_l_no sec_303 124_stat_3296 sec_2010 provides that the applicable_exclusion_amount is the sum of the basic exclusion amount and in the case of a surviving_spouse the dsue amount sec_2010 generally provides that the basic exclusion amount is dollar_figure to be adjusted for inflation annually after calendar_year sec_2010 defines the dsue amount to mean the lesser_of a the basic exclusion amount or b the excess of -- i the applicable_exclusion_amount of the last deceased spouse of the surviving_spouse over ii the amount with respect to which the tentative_tax is determined under sec_2001 on the estate of such deceased spouse sec_2010 provides that a dsue amount may not be taken into account by a surviving_spouse under sec_2010 unless the executor of the estate of the deceased spouse files an estate_tax_return on which such amount is computed and makes an election on such return that such amount may be so taken into account the election once made shall be irrevocable no election may be made if such return is filed after the time prescribed by law including extensions for filing such return plr-130165-16 sec_2010 provides that the secretary shall prescribe regulations as may be necessary or appropriate to implement sec_2010 sec_20_2010-2t a of the estate_tax regulations as in effect on date provides that to allow a decedent’s surviving_spouse to take into account that decedent’s dsue amount the executor of the decedent’s estate must elect portability of the dsue amount on a timely-filed form_706 under sec_20_2010-2t a the due_date of an estate_tax_return required to elect portability is nine months after the decedent’s date of death or the last day of the period covered by an extension if an extension of time for filing has been granted under sec_20_2010-2t a the portability election is made by timely filing a complete and properly prepared estate_tax_return unless the executor satisfies the requirements for the election not to apply in sec_20_2010-2t a i sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 provides that the term statutory election means an election whose due_date is prescribed by statute the term regulatory election means an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute a request for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election the due_date for the portability election is prescribed by statute in the case of an estate required to file an estate_tax_return under sec_6018 see sec_2010 sec_6075 and sec_6018 in the case of an estate that is not required to file an estate_tax_return under sec_6018 the due_date is prescribed by regulation see sec_20_2010-2t a see also sec_20_2010-2 and revproc_2014_18 plr-130165-16 2014_7_irb_513 sec_2 accordingly in the latter case a taxpayer may seek an extension of time to elect portability under the provisions of sec_301_9100-3 sec_6018 requires the filing of an estate_tax_return in all cases where the gross_estate exceeds the basic exclusion amount in effect under sec_2010 for the calendar_year which includes the date of death for purposes of this determination under sec_6018 the basic exclusion amount is reduced but not below zero by the sum of -- a the amount of the adjusted_taxable_gifts within the meaning of sec_2001 made by the decedent after date plus b the aggregate amount allowed as a specific exemption under sec_2521 as in effect before its repeal by the tax reform act of with respect to gifts made by the decedent after date as executor spouse represents that based on the value of the gross_estate and taking into account any taxable_gifts decedent’s estate is not required to file an estate_tax_return under sec_6018 under these facts the commissioner has discretionary authority under sec_301_9100-3 to grant to decedent’s estate an extension of time to elect portability based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly we grant an extension of time of days from the date of this letter in which to elect portability under sec_2010 the election should be made by filing a complete and properly-prepared form_706 and a copy of this letter within days from the date of this letter to the cincinnati service_center at the following address internal_revenue_service cincinnati service_center stop cincinnati oh for purposes of electing portability a form_706 filed by decedent’s estate within days from the date of this letter will be considered to be timely filed in accordance with the power_of_attorney on file with this office we have sent a copy of this letter to your authorized representatives except as expressly provided herein we neither express nor imply any opinion concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination if it is later determined that based on the value of the gross_estate and taking into account any taxable_gifts decedent’s estate is required to file an estate_tax_return plr-130165-16 pursuant to sec_6018 the commissioner is without authority under sec_301_9100-3 to grant to decedent’s estate an extension of time to elect portability and the grant of the extension referred to in this letter is deemed null and void this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely associate chief_counsel passthroughs and special industries melissa c liquerman _________________________ by melissa c liquerman chief branch office of the associate chief_counsel passthroughs and special industries enclosures copy for sec_6110 purposes copy of this letter cc


internal_revenue_service number release date index number -------------------------- ------------------------------ ----------- --------------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------- telephone number --------------------- refer reply to cc psi b09 plr-157102-04 date date ------- ------------------ --------------------------------------------------------------- legend grantor -------------------------- -------------------------------------------------------------------------------- trust ------------------------------------------------------------------------------------------------------------ date year dear ----------------- this responds to your representative’s letter dated date requesting an extension of time under sec_2642 of the internal_revenue_code and sec_301_9100-3 of the procedure and administration regulations to make an election under sec_2632 facts the information submitted states that on date grantor created trust and retained an interest for a term of four years grantor survived the term under the terms of trust upon the death of grantor there is a possibility that a generation-skipping_transfer gst may occur the estate_tax_inclusion_period with respect to grantor’s transfer to trust closed for gst tax purposes in year the year during which grantor’s retained_interest expired on his form_709 for year grantor did not make an election under sec_2632 to have the automatic allocation rules contained in sec_2632 not apply to the transfer because grantor’s counsel advised him that trust was not a gst_trust as defined in sec_2632 and thus the automatic allocation rules contained in sec_2632 did not apply to trust plr-157102-04 grantor is now advised by his counsel that trust is a gst_trust as defined in sec_2632 and accordingly requests an extension of time to make an election under sec_2632 to have the automatic allocation rules contained in sec_2632 not apply to the transfer law and analysis sec_2601 imposes a tax on every gst a gst is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip sec_2631 provides that for purposes of determining the inclusion_ratio every individual shall be allowed a gst tax exemption of dollar_figure adjusted for inflation under sec_2631 which may be allocated by such individual or his executor to any property with respect to which such individual is the transferor sec_2632 provides that if any individual makes an indirect_skip during such individual’s lifetime any unused portion of such individual’s gst_exemption will be allocated to the property transferred to the extent necessary to make the inclusion_ratio for such property zero the term indirect_skip means any transfer of property other than a direct_skip subject_to gift_tax that is made to a gst_trust sec_2632 with certain exceptions a gst_trust is a_trust that could have a gst with respect to the transferor sec_2632 sec_2632 provides that for purposes of sec_2632 an indirect_skip shall be deemed to have been made only at the close of the estate_tax_inclusion_period etip the fair_market_value of such transfer shall be the fair_market_value of the trust property at the close of the etip sec_26_2632-1 provides that an etip terminates at the time at which no portion of the property is includible in the transferor's gross_estate sec_2632 provides that an individual may elect to have sec_2632 not apply to an indirect_skip such an election shall be deemed to be timely if filed on a timely filed gift_tax_return for the calendar_year in which the transfer was made or deemed to have been made pursuant to sec_2632 or on such later date or dates as may be prescribed by the secretary sec_2642 provides generally that the secretary shall by regulation prescribe such circumstances and procedures under which extensions of time will be granted to make an allocation of gst tax exemption described in sec_2642 or and an election under sec_2632 or c such regulations shall include procedures for requesting comparable relief with respect to transfers made before the date of the enactment of this paragraph plr-157102-04 sec_2642 provides that in determining whether to grant relief under this paragraph the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant for purposes of determining whether to grant relief under this paragraph the time for making the allocation or election shall be treated as if not expressly prescribed by statute notice_2001_50 2001_2_cb_189 provides that under sec_2642 the time for allocating the gst tax exemption to lifetime transfers and transfers at death the time for electing out of the automatic allocation rules and the time for electing to treat any trust as a gst_trust are to be treated as if not expressly prescribed by statute the notice further provides that taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except in subtitles e g h and i sec_301_9100-3 provides that in general requests for extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 must be made under the rules of sec_301_9100-3 under sec_301_9100-1 a regulatory election includes an election whose due_date is prescribed by a notice published in the internal_revenue_bulletin in accordance with sec_2642 and notice_2001_50 taxpayers may seek an extension of time to make an election described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or to advise the taxpayer to make the election based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied therefore grantor is granted an extension of time of days from the date of this letter for making the election under sec_2632 to have the automatic allocation rules contained in sec_2632 not apply plr-157102-04 with respect to grantor’s transfer to trust the election should be made by completing a statement that identifies the trust describes the transfer and provides that the transferor is electing pursuant to sec_2632 to have the automatic allocation rules contained in sec_2632 not apply to the described transfer to the trust and submitting the statement a copy of grantor’s year form_709 and a copy of this letter to the cincinnati service_center at internal_revenue_service cincinnati service_center - stop cincinnati oh the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely heather c maloy associate chief_counsel passthroughs special industries cc