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 corp b04 plr-123025-07 date june internal_revenue_service number release date index numbers ------------------------- ----------------------------------------------- ---------------------------------- ---------------------------------------- ------------------------------------ legend legend distributing -------------------------------------- --------------------------------------------------------------- ----------------------- distributing ------------------------------------------------------------------------------------- ---------------------------------- ----------------------- distributing ---------------------------------------------------- -------------------------------------------------------------- ----------------------- distributing --------------- --------------------------------------------------------------- ----------------------- --------------------------------------------------------------- distributing --------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------- --------------------------------------------------------------- controlled --------------------------------------------------------------------------------------------------------------------- plr-123025-07 --------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------- controlled --------------------------------------------------------------------------------------- -------------------------------------------------------------- ----------------------- -------------------------------------------------------------- sub ---------------------------------------------------------------------------------- ----------------------- sub --------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------- sub ----------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------------- --------------------------------------------------------------- ----------------------- ----------------- --------------------------------------------------------------- ----------------------- ----------------------------------- 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----------------------- ---------------------------------- --------------------------------------------------------------- ----------------------- ---------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------------ llc llc llc llc llc llc llc llc llc llc plr-123025-07 llc --------------------------------------------------------------- ----------------------- --------------------------- --------------------------------------------------------------- ----------------------- ----------------------------------------- llc ------------------------------------------------------------------------------------------------------ llc llc llc llc llc llc llc llc llc ----------------------- ------------------------------------------ --------------------------------------------------------------- ----------------------- ------------------------------------------- --------------------------------------------------------------- ----------------------- ---------------------------------------- --------------------------------------------------------------- ----------------------- -------------------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------ --------------------------------------------------------------- ----------------------- ----------------------------------------------- --------------------------------------------------------------- ----------------------- -------------------------------------------- --------------------------------------------------------------- ----------------------- ----------------------------------------- --------------------------------------------------------------- ----------------------- ---------------------- plr-123025-07 llc llc llc llc llc llc llc llc llc llc llc 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----------------------- -------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------------------ --------------------------------------------------------------- ----------------------- --------------------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------------------- plr-123025-07 llc llc llc llc llc llc llc llc llc llc llc --------------------------------------------------------------- ----------------------- --------------------------------------- --------------------------------------------------------------- ----------------------- -------------------------------- --------------------------------------------------------------- ----------------------- -------------------------------------------- --------------------------------------------------------------- ----------------------- ---------------------------------- --------------------------------------------------------------- ----------------------- -------------------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------------------ --------------------------------------------------------------- ----------------------- --------------------------- --------------------------------------------------------------- ----------------------- ------------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------------------- --------------------------------------------------------------- ----------------------- -------------------------------------------- --------------------------------------------------------------- ----------------------- ------------------------------- plr-123025-07 llc llc llc llc llc llc llc llc llc llc llc 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--------------------------------------------------------------- ----------------------- ------------------------------------------ --------------------------------------------------------------- ----------------------- ------------------------------------- --------------------------------------------------------------- ----------------------- ------------------------ plr-123025-07 llc llc llc llc llc llc llc llc llc llc llc --------------------------------------------------------------- ----------------------- ----------------------------------------------- --------------------------------------------------------------- ----------------------- -------------------------------- --------------------------------------------------------------- ------------------ ------------------------------- --------------------------------------------------------------- ----------------------- ------------------------ --------------------------------------------------------------- ------------------ --------------------- --------------------------------------------------------------- ----------------------- ------------------------- --------------------------------------------------------------- ------------------ ---------------------- --------------------------------------------------------------- ----------------------- -------------------------------- --------------------------------------------------------------- ------------------ -------------------- --------------------------------------------------------------- ----------------------- ---------------------- --------------------------------------------------------------- ------------------ ---------------------- plr-123025-07 llc llc llc llc llc llc llc llc llc llc merger partner --------------------------------------------------------------- ------------------ ------------------------------------- --------------------------------------------------------------- ------------------ ---------------------------------------- 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--------------------------------------------------------------- ------------------ ---------------------------------------------- plr-123025-07 merger sub corporation x partnership partnership business a business b business c assets a assets b assets c assets d assets e assets f assets g --------------------------------------------------------------- ----------------------- ------------------------------------- --------------------------------------------------------------- ----------------------- --------------------------------------------------- ----------------------------------------- --------------------------------------------------------------- ----------------------- -------------------------------------------- --------------------------------------------------------------- ----------------- --------------------------------- ---------------------------------- ------------------------------------ -------------------------------------- ----------------- ----------------------------------------- ---------------------------------------- ---------------------------------- -------------------------- --------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- assets h bank distribution agent ------ -------------------------------------- --------------------- plr-123025-07 shareholder x shareholder y shareholder z target net working_capital year year year date date date date 5-percent_shareholder ---- ------------------------- ------------------------ ------------------------- ----------------- ------- ------- ------- ----------------- -------------- -------------- ------------- -------------------------------------------------------------- investment --------------------------------------------------------------------------------------------------------------------- partnerships --------------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------------------- -------------------------------------------------------------------- -------------------------------------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------------- ------------------------------------------------------------------ -------------- -------------- -------------- a b c ------------- -------------- ---- ---- ------------------ ------------------- ------------------- ---- ---- -- ---- ---- ----- plr-123025-07 d e f g h i j k l m n o p dear -------------- this letter responds to your date letter requesting rulings on certain federal_income_tax consequences of a series of proposed transactions the information provided in that letter and in later correspondence is summarized below the rulings contained in this letter are based on 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 materials submitted in support of the request for rulings verification of the information representations and other data may be required as part of the audit process moreover except as expressly set forth herein as regards sec_355 of the internal_revenue_code and the regulations thereunder this office has not reviewed any information pertaining to and has made no determination regarding whether a distribution distribution or the external distribution each described below i satisfies the business_purpose requirement of sec_1_355-2 of the income_tax regulations ii is used principally as a device for the plr-123025-07 distribution of the earnings_and_profits of the distributing_corporation or the controlled_corporation or both see sec_355 and sec_1_355-2 or iii is part of a plan or series of related transactions pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest in the distributing_corporation or the controlled_corporation see sec_355 and sec_1_355-7 summary of facts distributing is a company with a publicly traded single class of common_stock distributing through its direct and indirect subsidiaries operates several businesses including business a business b and business c distributing is the common parent of a consolidated_group of corporations and has numerous corporate and non-corporate direct and indirect subsidiaries distributing has repurchased its stock both on the market and in privately negotiated transactions from time to time in the past under a share repurchase program that became effective in year distributing was authorized to repurchase up to a shares of its common_stock the repurchase program through the end of year distributing had repurchased approximately b shares of its common_stock pursuant to the repurchase program in year distributing 1’s board_of directors increased the share repurchase authorization by b shares to c in total thereby increasing the number of unexercised authorized repurchase shares to approximately a as of date distributing had repurchased an additional d shares thereby reducing the number of unexercised authorized repurchase shares to approximately e shares distributing anticipates further significant share repurchases going forward the repurchase program does not have an expiration date distributing wholly owns distributing distributing wholly owns distributing distributing also owns a minority interest in sub distributing wholly owns distributing which wholly owns distributing sub sub and sub and llc llc llc llc llc llc llc llc llc llc and llc each llc a business_entity as defined in sec_301_7701-2 of the procedure and administration regulations that is disregarded as an entity separate from its owner for federal_income_tax purposes a disregarded_entity distributing also owns a minority interest in sub sub wholly owns sub sub is the general_partner and sub is the limited_partner in partnership sub wholly owns sub distributing wholly owns sub sub sub sub sub sub sub sub sub and controlled sub wholly owns sub sub and sub sub wholly owns sub sub wholly owns sub sub wholly owns sub sub wholly owns controlled merger partner is a company with a publicly traded single class of common_stock merger partner wholly owns merger sub plr-123025-07 prior to date corporation x merger partner’s predecessor was a publicly traded corporation in date the investment partnerships acting through newly formed merger partner purchased all of the stock of corporation x for cash in connection with that transaction merger partner issued its common_stock to the investment partnerships and to n employees of merger partner together with m entities controlled by an employee the merger partner stock issued to the employees and to the m entities are subject_to stockholder’s agreements and other ancillary arrangements the stockholder agreements that prescribe the manner in which these shares can be transferred including through dispositions of some or all of the shares in connection with a disposition of such shares of merger partner stock held by the investment partnerships subsequently shareholder x and shareholder y entered into identical stockholder agreements relating to shares of merger partner common_stock that shareholder x and shareholder y acquired on date and date respectively merger partner also has options outstanding to acquire its common_stock the merger partner options that are held by employees of merger partner and its subsidiaries the merger partner options were granted to its employees in connection with their employment and provision of services to merger partner and its subsidiaries the terms of the merger partner options are governed by stock_option agreements between merger partner and each holder of a merger partner option the option agreements and together with the stockholder agreements the merger partner agreements and related notices of stock_option grant the option agreements and related option notices contain terms governing the vesting exercisability and termination of the option some option agreements also include provisions that permit or require the holder of a merger partner option to exercise some or all of such options in connection with a disposition of merger partner stock by the investment partnerships to the extent the merger partner agreements are still in effect it is anticipated that they will either be terminated or modified a termination at or prior to the time of the merger defined below such that holders of the merger partner options will no longer be required to exercise any of their merger partner options or to dispose_of any of their merger partner stock in connection with the disposition of merger partner stock by the investment partnerships distributing wishes to separate business a from business b and business c consolidate under controlled assets a owned by distributing 1’s subsidiaries and distribute the controlled stock to distributing 1’s shareholders to facilitate a combination of business a with the business of merger partner the corporate business purposes proposed transactions to achieve the corporate business purposes distributing has proposed and partially completed the following steps the proposed transaction plr-123025-07 i distributing contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc ii iii llc contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc llc contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc iv sub contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc contributed assets c to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc v sub contributed all of the stock in sub sub and sub along with assets a to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets c assets d and assets e to llc a disregarded_entity in exchange for all of the membership interests in llc vi sub contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc vii sub contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc contributed assets c and assets d to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc viii sub contributed assets c to llc a disregarded_entity in exchange for all of the membership interests in llc contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc ix sub contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc x sub contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets b to llc plr-123025-07 a disregarded_entity in exchange for all of the membership interests in llc xi sub contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc xii sub contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc xiii sub contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc contributed assets b to llc a disregarded_entity in exchange for all of the membership interests in llc and contributed assets c to llc a disregarded_entity in exchange for all of the membership interests in llc xiv controlled contributed assets a to llc a disregarded_entity in exchange for all of the membership interests in llc and assets b to llc a disregarded_entity in exchange for all of the membership interests in llc xv partnership contributed assets d to llc a disregarded_entity in exchange for all of the membership interests in llc xvi sub contributed all of the membership interests in llc to llc sub contributed all of the membership interests in llc to llc sub contributed all of the membership interests in llc to llc sub contributed all of the membership interests in llc to llc sub contributed all of the membership interests in llc to llc sub contributed all of the membership interests in llc to llc sub contributed all of the membership interests in llc to llc sub contributed all of the membership interests in llc to llc controlled contributed all of the membership interests in llc to llc xvii partnership distributed undivided interests in certain assets a and assets b to each of sub and sub in accordance with the partnership_interest of sub and sub respectively f percent and g percent in partnership sub and sub contributed their respective undivided interests in those assets a and assets b to llc a newly-formed llc that is treated as a partnership for federal_income_tax purposes in exchange for f percent and g percent respectively of the membership interests in llc llc contributed assets b to llc a newly-formed disregarded_entity in exchange for all of the membership interests in llc plr-123025-07 xviii partnership distributed undivided interests in certain other assets a and assets b to each of sub and sub in accordance with the partnership_interest of each in partnership respectively f percent and g percent sub and sub contributed their respective undivided interests in those assets a and assets b to llc llc contributed assets b to llc xix sub sub and sub each an upstream_merger parent will cause sub sub and sub respectively each an upstream_merger subsidiary to merge an upstream_merger into llc llc and llc respectively each a disregarded_entity and an upstream_merger llc wholly owned by the respective upstream_merger parent with in each case the upstream_merger llc surviving xx sub will form llc and llc each a disregarded_entity and will hold all of the membership interests in each sub will contribute assets f to llc and llc will license the use of such assets f to llc xxi controlled will form llc and llc each a disregarded_entity and will hold all of the membership interests in each each a cross-chain merger llc sub and sub each a cross-chain merger subsidiary and wholly owned by distributing a cross-chain merger parent will merge a cross-chain merger into llc and llc respectively with llc and llc surviving xxii llc will distribute all of the membership interests in llc to llc llc will contribute all of the membership interests in llc and llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc xxiii llc will distribute to controlled all of the membership interests in llc llc will distribute to controlled all of the membership interests in llc xxiv distributing an upstream_merger parent will form llc llc llc llc llc and llc each a disregarded_entity and will hold all of the membership interests in each each an upstream_merger llc sub sub sub sub sub and sub each an upstream_merger subsidiary will merge an upstream_merger into llc llc llc llc llc and llc respectively with in each case the upstream_merger llc surviving xxv llc will form llc and llc each a disregarded_entity and will hold all of the membership interests in each llc will contribute assets f to llc and llc will license the use of such assets f to llc plr-123025-07 xxvi xxvii xxviii xxix llc will form llc and llc each a disregarded_entity and will hold all of the membership interests in each llc will contribute assets f to llc and llc will license the use of such assets f to llc llc will form llc and llc each a disregarded_entity and will hold all of the membership interests in each llc will contribute assets f to llc and llc will license the use of such assets f to llc llc will form llc and llc each a disregarded_entity and will hold all of the membership interests in each llc will contribute assets f to llc and llc will license the use of such assets f to llc llc will distribute all of the membership interests in llc to llc and llc will distribute all of the membership interests in llc to llc llc will distribute all of the membership interests in llc to llc xxx llc will contribute all of the membership interests in llc to llc llc will contribute all of the membership interests in llc to llc xxxi llc will contribute all of the membership interests in llc and llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc llc will contribute all of the membership interests in llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc llc will contribute all of the membership interests in llc and llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc llc will contribute all of the membership interests in llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc llc will contribute all of the membership interests in llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc xxxii llc will distribute all of the membership interests in llc to llc xxxiii llc will distribute all of the membership interests in llc and llc llc will distribute all of the membership interests in llc and llc llc will distribute all of the membership interests in llc llc will distribute all of the membership interests in llc llc will distribute all of the membership interests in llc and llc will distribute all of the membership interests in llc in each case to distributing xxxiv controlled will purchase all of the stock of controlled from sub for dollar_figureh plr-123025-07 xxxv distributing a distributing will contribute a contribution and contribution all of the membership interests in each of llc llc llc llc llc llc llc and llc to controlled a controlled and distributing will distribute a distribution and distribution all of the stock of controlled to distributing xxxvi sub will transfer all of its partnership interests in partnership to sub in constructive exchange for sub common_stock the sub exchange xxxvii sub an upstream_merger parent will cause sub an upstream_merger subsidiary to merge an upstream_merger into llc a newly-formed disregarded_entity wholly owned by sub an upstream_merger llc with llc surviving xxxviii controlled will form llc llc and llc each a disregarded_entity and will hold all of the membership interests in each each a cross-chain merger llc sub sub and sub each a cross-chain merger subsidiary and wholly owned by distributing a cross-chain merger parent will merge a cross-chain merger into llc llc and llc respectively with llc llc and llc surviving xxxix llc will contribute all of its membership interests in llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc llc will contribute all of its membership interests in llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc llc and llc will each contribute their respective interests in llc to partnership a disregarded_entity and will hold f percent and g percent respectively of the partnership interests in partnership llc will contribute all of the membership interests in llc to llc a newly-formed disregarded_entity and will hold all of the membership interests in llc xl llc will distribute all of the membership interests in llc to llc xli llc will distribute all of the membership interests in llc llc will distribute all of the membership interests in llc and llc will distribute all of the membership interests in llc in each case to controlled xlii distributing a distributing will contribute a contribution and contribution all of the membership interests in each of llc llc llc and all of its stock in sub to controlled a controlled and distributing will distribute a distribution and distribution all of the stock of controlled to distributing plr-123025-07 xliii distributing will distribute distribution all of the stock of controlled to distributing xliv bank will lend between dollar_figurei and dollar_figurej to controlled xlv all disregarded entities and other entities held directly or indirectly by controlled will transfer assets g to controlled xlvi controlled a distributing will contribute a contribution and controlled contribution assets g assets h and all of the membership interests in each of llc llc llc llc llc llc and llc to controlled a controlled controlled will distribute a distribution and controlled distribution all of the controlled stock to distributing xlvii distributing a distributing will contribute a contribution and contribution all of its stock in sub to controlled a controlled distributing will distribute a distribution and distribution all of the stock of controlled to distributing xlviii distributing will cause controlled to recapitalize the recapitalization xlix distributing will distribute all of the stock of controlled to the distribution agent who will hold the controlled stock on behalf of the distributing shareholders entitled to such stock the external distribution to the extent that distributing shareholders would be entitled to receive fractional shares of controlled stock in the external distribution the distribution agent will aggregate such fractional shares into whole shares of controlled stock l merger partner will cause merger sub to merge into controlled with controlled surviving the merger in the merger the distribution agent will receive on behalf of the distributing shareholders in exchange for their shares of controlled stock merger partner stock representing in the aggregate between k percent and l percent of the total combined voting power of merger partner stock with respect to merger partner stock received by the distribution agent in exchange for the aggregated fractional shares of controlled stock the distribution agent will sell such shares of merger partner stock in the market and distribute the proceeds pro_rata to the distributing shareholders entitled to such fractional shares the composition of merger partner’s board_of directors will not change as a result of the merger no changes have been made to merger partner’s certificate of incorporation regarding the election of merger partner’s board_of directors in connection with the merger in addition merger partner has no intention to change its certificate of incorporation regarding the election of its board_of directors in connection with the proposed transaction plr-123025-07 of controlled 1’s board_of directors in connection with the merger merger partner will designate all of the members li distributing and merger partner will within p days after the merger calculate the net working_capital of controlled at the time of the merger the final net working_capital and controlled will pay distributing the amount by which final net working_capital exceeds the target net working_capital or distributing will pay controlled the amount by which final net working_capital is less than the target net working_capital as applicable the working_capital adjustment distributing and controlled also will enter into agreements under which the parties will agree to indemnify each other for certain losses including losses arising out of or resulting from the assets contributed to controlled certain events occurring before the external distribution untrue statements or representations breaches of contract violations of law and other similar events the indemnity agreements the indemnity agreements will include a tax_sharing_agreement under which the parties will agree to indemnify each other for tax and related liabilities relating to certain tax periods ending before on and after the date of the external distribution in connection with the proposed transaction direct and indirect subsidiaries of distributing will restructure certain intercompany indebtedness some of which restructuring has already occurred the intercompany debt restructuring representations each upstream_merger the taxpayer makes the following representations for each upstream_merger described above in steps xix xxiv and xxxvii a1 upstream_merger parent will be the owner of at least percent of the single outstanding class of the upstream_merger subsidiary stock at the effective time of the upstream_merger b1 no shares of upstream_merger subsidiary stock will have been redeemed during the three years preceding the effective time of the upstream_merger c1 upon the upstream_merger the upstream_merger subsidiary will cease to d1 upstream_merger subsidiary will not retain any assets following the be a going concern upstream_merger plr-123025-07 e1 except for i certain transfers of employees and ii assets treated for federal_income_tax purposes as acquired from a lower-tier upstream_merger subsidiary by upstream_merger subsidiary in the upstream_merger of the lower-tier upstream_merger subsidiary upstream_merger subsidiary will not have acquired assets in any nontaxable_transaction at any time except for acquisitions occurring more than three years prior to the effective time of the upstream_merger f1 except for dispositions i in the ordinary course of business ii which occurred more than three years prior to the effective time of the upstream_merger or iii which occur pursuant to steps undertaken as part of the proposed transaction no assets of upstream_merger subsidiary other than sub and sub have been or will be disposed of by either upstream_merger subsidiary or upstream_merger parent g1 sub will report all earned_income represented by assets that will be distributed to distributing h1 except for steps undertaken as part of the proposed transaction prior to the effective time of the upstream_merger no assets of upstream_merger subsidiary will have been distributed in_kind transferred or sold to upstream_merger parent except for i transactions occurring in the normal course of business and ii transactions occurring more than three years prior to the effective time of the upstream_merger i1 the fair_market_value of the assets of upstream_merger subsidiary will exceed its liabilities at the effective time of the upstream_merger j1 upstream_merger parent is not an organization that is exempt from federal_income_tax under sec_501 or any other provision of the code k1 all other transactions undertaken contemporaneously with in anticipation of in conjunction with or in any way related to the upstream_merger have been fully disclosed l1 there is no intercorporate indebtedness existing between upstream_merger parent and upstream_merger subsidiary that was issued acquired or will be settled at a discount m1 the upstream_merger will be pursuant to state law each cross-chain merger the taxpayer makes the following representations for each cross-chain merger described above in steps xxi and xxxviii plr-123025-07 a2 controlled has no plan or intention to reacquire any of its stock that may be deemed issued in the cross-chain merger other than any such stock as may be deemed reacquired in the recapitalization b2 controlled has no plan or intention to sell or otherwise dispose_of the assets acquired in the cross-chain merger except for i dispositions made in the ordinary course of business ii transfers described in sec_368 and the regulations thereunder or iii dispositions pursuant to the proposed transaction c2 the liabilities of cross-chain merger subsidiary assumed within the meaning of sec_357 by controlled in the cross-chain merger and any liabilities to which the assets of cross-chain merger subsidiary are subject were incurred by cross-chain merger subsidiary in the ordinary course of its business and are associated with the assets transferred d2 following the cross-chain merger controlled will continue the historic_business of cross-chain merger subsidiary or use a significant portion of cross-chain merger subsidiary’s historic_business_assets in a business either directly or through one or more members of controlled 1’s qualified_group within the meaning of sec_1 d ii or one or more partnerships in which controlled and members of its qualified_group own an aggregate interest representing a significant interest in such business or have active and substantial management functions as partners in such business each within the meaning of sec_1_368-1 e2 there is no intercorporate indebtedness existing between cross-chain merger subsidiary and controlled that was issued acquired or will be settled at a discount f2 no two parties to the cross-chain merger are investment companies as defined in sec_368 and iv g2 the fair_market_value of cross-chain merger subsidiary’s assets transferred to controlled in the cross-chain merger will equal or exceed the liabilities assumed within the meaning of sec_357 by controlled h2 at least percent of the proprietary interest in cross-chain merger subsidiary will be preserved within the meaning of sec_1_368-1 i2 cross-chain merger subsidiary is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 j2 the cross-chain parent the cross-chain merger subsidiary and controlled will pay their respective expenses if any incurred in connection with the cross-chain merger plr-123025-07 k2 the cross-chain merger will be effected pursuant to a state merger statute under which at the effective time of the transaction i all of the assets and liabilities of the cross-chain merger subsidiary will become the assets and liabilities of a disregarded_entity that is wholly owned by controlled and ii the cross-chain merger subsidiary will cease its separate legal existence for all purposes contribution and distribution the taxpayer makes the following representations regarding contribution and distribution described above in step xxxv a3 no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation b3 the five years of financial information submitted on behalf of distributing is representative of the corporation’s present operation and with regard to distributing there have been no substantial operational changes since the date of the last financial statements submitted except for operational changes resulting from implementation of the proposed transaction c3 the five years of financial information submitted on behalf of controlled is representative of the present operations of controlled and with regard to controlled there have been no substantial operational changes since the date of the last financial statements submitted except for operational changes resulting from implementation of the proposed transaction d3 following the transaction distributing and controlled will each continue independently and with its separate employees and or in the case of distributing employees of the distributing consolidated_group the active_conduct of its share of all the integrated activities of the business conducted by distributing prior to consummation of the transaction except that distributing and its affiliates will provide certain transitional services for controlled and its affiliates following the external distribution e3 distribution is carried out for the corporate business purposes distribution is motivated in whole or substantial part by one or more of these corporate business purposes f3 the proposed transaction is not used principally as a device for the distribution of the earnings_and_profits of distributing controlled or both plr-123025-07 g3 i the total adjusted bases and the fair_market_value of the assets transferred to controlled by distributing equals or exceeds the sum of the liabilities assumed as determined under sec_357 by controlled and ii the liabilities assumed as determined under sec_357 in the transaction were incurred in the ordinary course of business and are associated with the assets being transferred h3 no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution of the stock of controlled in distribution other than debt incurred in the ordinary course of business any such indebtedness will not constitute stock_or_securities i3 immediately before the distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d further at the time of distribution distributing will not have an excess_loss_account in the stock of controlled j3 payments made in connection with all continuing transactions if any between distributing and controlled will be for either fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length or based on fully allocated cost which distributing believes approximates fair_market_value except that certain direct and indirect distributing subsidiaries intend to sublicense certain intellectual_property to controlled and certain direct and indirect subsidiaries of controlled at no charge k3 no two parties to the transaction will be investment companies as defined in sec_368 and iv l3 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution m3 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was either i acquired by purchase as defined in sec_355 and during the five- year period determined after applying sec_355 ending on the date of the distribution or ii attributable to distributions on distributing stock that was acquired by purchase plr-123025-07 as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution n3 the total fair_market_value of the assets transferred by distributing to controlled in contribution will exceed the sum of i the amount of any liabilities assumed within the meaning of sec_357 by controlled in connection with the exchange ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection with the exchange and iii the amount of cash and the fair_market_value of any other_property other than stock and securities permitted to be received under sec_361 without the recognition of gain received by distributing in connection with the exchange the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately_after_the_exchange o3 provided the service rules as requested the distribution of controlled stock in distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled including any predecessor or successor of such corporation sub exchange the taxpayer makes the following representations regarding the sub exchange described above in step xxxvi a4 no stock_or_securities will be issued for services rendered to or for the benefit of sub in connection with the sub exchange and no stock_or_securities will be issued for indebtedness of sub b4 the sub exchange is not the result of the solicitation by a promoter broker or investment house c4 sub will not retain any rights in the property transferred to sub d4 the adjusted_basis and the fair_market_value of the assets to be transferred by sub to sub will equal or exceed the sum of the liabilities assumed within the meaning of sec_357 and taking into account the application of revrul_80_323 c b by sub e4 the liabilities of sub to be assumed within the meaning of sec_357 and taking into account the application of revrul_80_323 c b by sub were incurred in the ordinary course of business and are associated with the assets to be transferred plr-123025-07 f4 other than debt incurred in the ordinary course of business there is no indebtedness between sub and sub and there will be no indebtedness created in favor of sub as a result of the sub exchange g4 the transfers and exchanges in connection with sub exchange will occur under a plan agreed upon before the transaction in which the rights of the parties are defined h4 all exchanges in connection with the sub exchange will occur on approximately the same date i4 there is no plan or intention on the part of sub to redeem or otherwise reacquire any stock to be issued in the sub exchange j4 taking into account any issuance of additional shares of sub stock any issuance of stock for services the exercise of any sub stock_rights warrants or subscriptions a public offering of sub stock and the sale exchange transfer by gift or other_disposition of any of the stock of sub to be received in the exchange other than the disposition of such stock in the merger of sub into llc or the transfer by controlled to controlled of all of the membership interests in llc sub will be in control of sub within the meaning of sec_368 k4 sub will constructively receive stock securities or other_property approximately equal to the fair_market_value of the property transferred to sub l4 sub will remain in existence and except for transfers in the normal course of business retain and use the property transferred to it in a trade_or_business m4 there is no plan or intention by sub to dispose_of the transferred property other than in the normal course of business operations n4 each of the parties to the sub exchange will pay its own expenses if any incurred in connection with the sub exchange o4 sub will not be an investment_company within the meaning of sec_351 and sec_1_351-1 p4 sub is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 and the stock_or_securities received in the exchange will not be used to satisfy the indebtedness of sub q4 sub will not be a personal_service_corporation within the meaning of sec_269a plr-123025-07 r4 the total fair_market_value of the assets transferred by sub to sub will exceed the sum of i the amount of any liabilities assumed within the meaning of sec_357 and taking into account the application of revrul_80_323 c b by sub in connection with the exchange ii the amount of any liabilities owed to sub by sub that are discharged or extinguished in connection with the exchange and iii the amount of cash and the fair_market_value of any other_property other than stock permitted to be received under sec_351 without the recognition of gain received by sub in connection with the exchange the fair_market_value of the assets of sub will exceed the amount of its liabilities immediately_after_the_exchange sec_4 the total fair_market_value of the partnership_interest in partnership transferred by sub to sub in the sub exchange plus sub 4’s share of partnership 1’s liabilities will equal or exceed the aggregate basis of sub in the transferred partnership_interest contribution and distribution the taxpayer makes the following representations regarding contribution and distribution described above in step xlii a5 no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation b5 distributing is and immediately after distribution will be affiliated with distributing in a manner that satisfies sec_1504 without regard to sec_1504 b c5 following the transaction distributing and or members of its separate_affiliated_group as defined in sec_355 will continue the active_conduct of business c and controlled and or members of its separate_affiliated_group as defined in sec_355 will continue the active_conduct of business a in each case independently and with their separate employees and or in the case of distributing employees of the distributing consolidated_group except that distributing and its affiliates will provide certain transitional services for controlled and its affiliates following the external distribution d5 distribution is carried out for the corporate business purposes distribution is motivated in whole or substantial part by one or more of these corporate business purposes e5 the proposed transaction is not used principally as a device for the distribution of the earnings_and_profits of distributing controlled or both plr-123025-07 f5 i the total adjusted bases and the fair_market_value of the assets transferred to controlled by distributing equals or exceeds the sum of the liabilities assumed as determined under sec_357 by controlled and ii the liabilities assumed as determined under sec_357 in the transaction were incurred in the ordinary course of business and are associated with the assets being transferred g5 no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution of the stock of controlled in distribution other than debt incurred in the ordinary course of business any such indebtedness will not constitute stock_or_securities h5 immediately before the distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d further at the time of distribution distributing will not have an excess_loss_account in the stock of controlled i5 payments made in connection with all continuing transactions if any between distributing and controlled will be for either fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length or based on fully allocated cost which distributing believes approximates fair_market_value j5 no two parties to the transaction will be investment companies as defined in sec_368 and iv k5 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution l5 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled1 stock that was either i acquired by purchase as defined in sec_355 and during the five- year period determined after applying sec_355 ending on the date of the distribution or ii attributable to distributions on distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution plr-123025-07 m5 the total fair_market_value of the assets transferred by distributing to controlled in contribution will exceed the sum of i the amount of any liabilities assumed within the meaning of sec_357 by controlled in connection with the exchange ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection with the exchange and iii the amount of cash and the fair_market_value of any other_property other than stock and securities permitted to be received under sec_361 without the recognition of gain received by distributing in connection with the exchange the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately_after_the_exchange n5 provided the service rules as requested the distribution of controlled stock in distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled including any predecessor or successor of such corporation distribution the taxpayer makes the following representations regarding distribution described above in step xliii a6 no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation b6 distributing is and immediately after distribution will be affiliated with distributing in a manner that satisfies sec_1504 without regard to sec_1504 b c6 following the transaction distributing and or members of its separate_affiliated_group as defined in sec_355 will continue the active_conduct of business c and controlled and or members of its separate_affiliated_group as defined in sec_355 will continue the active_conduct of business a in each case independently and with its separate employees and or in the case of distributing employees of the distributing consolidated_group except that distributing and its affiliates will provide certain transitional services for controlled and its affiliates following the external distribution d6 distribution is carried out for the corporate business purposes distribution is motivated in whole or substantial part by one or more of these corporate business purposes e6 the proposed transaction is not used principally as a device for the distribution of the earnings_and_profits of distributing controlled or both plr-123025-07 f6 no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution of the stock of controlled in distribution other than debt incurred in the ordinary course of business any such indebtedness will not constitute stock_or_securities g6 immediately before the distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d further at the time of distribution distributing will not have an excess_loss_account in the stock of controlled h6 payments made in connection with all continuing transactions if any between distributing and controlled will be for either fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length or based on fully allocated cost which distributing believes approximates fair_market_value i6 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution j6 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was either i acquired by purchase as defined in sec_355 and during the five- year period determined after applying sec_355 ending on the date of the distribution or ii attributable to distributions on distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution k6 provided the service rules as requested the distribution of controlled stock in distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled including any predecessor or successor of such corporation controlled contribution and controlled distribution plr-123025-07 the taxpayer makes the following representations regarding the controlled contribution and the controlled distribution described above in step xlvi a7 no part of the consideration to be distributed by controlled will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation b7 the five years of financial information submitted on behalf of controlled is representative of the present operations of controlled and with regard to controlled there have been no operational changes since the date of the last financial statements submitted except as intended to occur pursuant to the proposed transaction c7 following the transaction controlled and controlled will each continue independently and with its separate employees and or in the case of controlled employees of the distributing consolidated_group the active_conduct of its share of all the integrated activities of the business conducted by controlled prior to consummation of the transaction except that distributing and its affiliates will provide certain transitional services for controlled and its affiliates following the external distribution d7 the controlled distribution is carried out for the corporate business purposes the controlled distribution is motivated in whole or substantial part by one or more of these corporate business purposes e7 the proposed transaction is not used principally as a device for the distribution of the earnings_and_profits of controlled controlled or both f7 i the total adjusted bases and the fair_market_value of the assets transferred to controlled by controlled equals or exceeds the sum of the liabilities assumed as determined under sec_357 by controlled and ii the liabilities assumed as determined under sec_357 in the transaction were incurred in the ordinary course of business and are associated with the assets being transferred g7 no intercorporate debt will exist between controlled and controlled at the time of or subsequent to the distribution of the stock of controlled in the controlled distribution other than debt incurred in the ordinary course of business any such indebtedness will not constitute stock_or_securities h7 immediately before the distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as plr-123025-07 published by t d further at the time of the controlled distribution controlled will not have an excess_loss_account in the stock of controlled i7 payments made in connection with all continuing transactions if any between controlled and controlled will be for either fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length or based on fully allocated cost which distributing believes approximates fair_market_value j7 no two parties to the transaction will be investment companies as defined in sec_368 and iv k7 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution l7 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was either i acquired by purchase as defined in sec_355 and during the five- year period determined after applying sec_355 ending on the date of the distribution or ii attributable to distributions on controlled stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution m7 the total fair_market_value of the assets transferred by controlled to controlled in the controlled contribution will exceed the sum of i the amount of any liabilities assumed within the meaning of sec_357 by controlled in connection with the exchange ii the amount of any liabilities owed to controlled by controlled that are discharged or extinguished in connection with the exchange and iii the amount of cash and the fair_market_value of any other_property other than stock and securities permitted to be received under sec_361 without the recognition of gain received by controlled in connection with the exchange the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately_after_the_exchange n7 provided the service rules as requested the distribution of controlled stock in the controlled distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest plr-123025-07 within the meaning of sec_355 in controlled or controlled including any predecessor or successor of such corporation contribution and distribution the taxpayer makes the following representations regarding contribution and distribution described above in step xlvii a8 no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation b8 distributing is and immediately after distribution will be affiliated with distributing in a manner that satisfies sec_1504 without regard to sec_1504 c8 following the transaction distributing and or members of its separate_affiliated_group as defined in sec_355 will continue the active_conduct of business c and controlled and or members of its separate_affiliated_group as defined in sec_355 will continue the active_conduct of business a in each case independently and with its separate employees and or in the case of distributing employees of the distributing consolidated_group except that distributing and its affiliates will provide certain transitional services for controlled and its affiliates following the external distribution d8 distribution is carried out for the corporate business purposes distribution is motivated in whole or substantial part by one or more of these corporate business purposes e8 the proposed transaction is not used principally as a device for the distribution of the earnings_and_profits of distributing controlled or both f8 i the total adjusted bases and the fair_market_value of the assets transferred to controlled by distributing equals or exceeds the sum of the liabilities assumed as determined under sec_357 by controlled and ii the liabilities assumed as determined under sec_357 in the transaction were incurred in the ordinary course of business and are associated with the assets being transferred g8 no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution of the stock of controlled in distribution other than debt incurred in the ordinary course of business any such indebtedness will not constitute stock_or_securities h8 immediately before the distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany plr-123025-07 transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d further at the time of distribution distributing will not have an excess_loss_account in the stock of controlled i8 payments made in connection with all continuing transactions if any between distributing and controlled will be for either fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length or based on fully allocated cost which distributing believes approximates fair_market_value j8 no two parties to the transaction will be investment companies as defined in sec_368 and iv k8 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution l8 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was either i acquired by purchase as defined in sec_355 and during the five- year period determined after applying sec_355 ending on the date of the distribution or ii attributable to distributions on distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution m8 the total fair_market_value of the assets transferred by distributing to controlled in contribution will exceed the sum of i the amount of any liabilities assumed within the meaning of sec_357 by controlled in connection with the exchange ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection with the exchange and iii the amount of cash and the fair_market_value of any other_property other than stock and securities permitted to be received under sec_361 without the recognition of gain received by distributing in connection with the exchange the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately_after_the_exchange n8 provided the service rules as requested the distribution of controlled stock in distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of plr-123025-07 sec_355 in distributing or controlled including any predecessor or successor of such corporation external distribution the taxpayer makes the following representations regarding the external distribution described above in step xlix a9 the indebtedness owed by controlled to distributing after the external distribution will not constitute stock_or_securities b9 no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation c9 distributing is and immediately after the external distribution will be affiliated with distributing in a manner that satisfies sec_1504 without regard to sec_1504 b d9 following the transaction distributing and or members of its separate_affiliated_group as defined in sec_355 will continue the active_conduct of business c and controlled and or members of its separate_affiliated_group as defined in sec_355 will continue the active_conduct of business a in each case independently and with their separate employees except that distributing and its affiliates will provide certain transitional services for controlled and its affiliates following the external distribution e9 the external distribution is carried out for the corporate business purposes the external distribution is motivated in whole or substantial part by one or more of these corporate business purposes f9 the proposed transaction is not used principally as a device for the distribution of the earnings_and_profits of distributing controlled or both g9 no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution of the stock of controlled in the distributing distribution other than debt incurred in the ordinary course of business any such indebtedness will not constitute stock_or_securities h9 immediately before the distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d further any excess_loss_account distributing may have in plr-123025-07 the stock of controlled will be included in income immediately before the external distribution see sec_1_1502-19 i9 payments made in connection with all continuing transactions if any between distributing and controlled will be for either fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length or based on fully allocated cost which distributing believes approximates fair_market_value j9 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution k9 for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was either i acquired by purchase as defined in sec_355 and during the five- year period determined after applying sec_355 ending on the date of the distribution or ii attributable to distributions on distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution l9 all repurchases of stock by distributing prior to the date of the external distribution were not or to the extent they have not yet occurred will not be related to the proposed transaction and the amount and timing of such repurchases would have been the same regardless of the proposed transaction m9 provided the service rules as requested the distribution of controlled stock in the external distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled including any predecessor or successor of such corporation n9 the shareholders of controlled immediately before the merger will receive in the merger stock possessing at least o percent of the total combined voting power of all classes of merger partner stock entitled to vote and at least o percent of the total value of shares of all classes of merger partner stock o9 based on distributing 1’s and controlled 1’s review of schedules 13d and 13g filings with the sec with respect to distributing in the previous five-year period plr-123025-07 other than shareholder z no shareholder has been a 5-percent_shareholder of distributing during the previous five-year period and no shareholder will be a percent shareholder of distributing immediately following the external distribution the taxpayer makes the following representations regarding the merger merger described above in step l a10 the fair_market_value of merger partner stock and other consideration received by each controlled shareholder will be approximately equal to the fair_market_value of the controlled stock surrendered in the exchange b10 at least percent of the proprietary interest in controlled will be exchanged for merger partner stock and will be preserved within the meaning of sec_1_368-1 c10 following the transaction controlled will hold i at least percent of the fair_market_value of its net assets and at least percent of the fair_market_value of its gross assets and ii at least percent of the fair_market_value of merger sub’s net assets and at least percent of the fair_market_value of merger sub’s gross assets held immediately prior to the transaction for purposes of this representation amounts paid_by controlled or merger sub to dissenters amounts paid_by controlled or merger sub to shareholders who receive cash or other_property amounts used by controlled or merger sub to pay reorganization expenses and all redemptions and distributions except for regular normal dividends made by controlled will be included as assets of controlled or merger sub respectively immediately prior to the transaction d10 prior to the transaction merger partner will be in control of merger sub within the meaning of sec_368 e10 none of the compensation received by any shareholder-employee of controlled will be separate consideration for or allocable to any of his or her shares of controlled stock none of the shares of merger partner stock received by any shareholder-employee will be separate consideration for or allocable to any employment agreement and the compensation paid to any shareholder-employee will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s-length for similar services f10 controlled has no plan or intention to issue additional shares of its stock that would result in merger partner losing control of controlled within the meaning of sec_368 plr-123025-07 g10 merger partner has no plan or intention to reacquire directly or through a related_person within the meaning of sec_1_368-1 any of its stock issued in the merger h10 merger sub will have no liabilities assumed within the meaning of sec_357 by controlled and will not transfer to controlled any assets subject_to liabilities in the merger i10 following the merger merger partner will continue controlled 1’s historic_business or use a significant portion of controlled 1’s historic_business_assets in a business either directly or through one or more members of merger partner’s qualified_group within the meaning of sec_1_368-1 or one or more partnerships in which merger partner and members of its qualified_group own an aggregate interest representing a significant interest in such business or have active and substantial management functions as partners in such business each within the meaning of sec_1_368-1 j10 there is no intercorporate indebtedness existing between merger partner and controlled or between merger sub and controlled that was issued acquired or will be settled at a discount k10 in the merger shares of controlled stock representing control of controlled as defined in sec_368 will be exchanged solely_for_voting_stock of merger partner for purposes of this representation shares of controlled stock exchanged for cash or other_property originating with merger partner will be treated as outstanding controlled stock on the date of the merger l10 at the time of the merger controlled will not have outstanding any warrants options convertible securities or any other type of right pursuant to which any person could acquire stock in controlled that if exercised or converted would affect merger partner’s acquisition or retention of control of controlled as defined in sec_368 m10 merger partner does not own nor has it owned during the past five years any shares of the stock of controlled n10 merger partner has no plan or intention to liquidate controlled to merge controlled with or into another corporation to sell or otherwise dispose_of the stock of controlled except for transfers of stock to corporations controlled by merger partner or to cause controlled to sell or otherwise dispose_of any of its assets or of any of the assets acquired from merger sub except for i dispositions made in the ordinary course of business or ii transfers of assets to a corporation controlled by controlled plr-123025-07 o10 no two parties to the transaction are investment companies as defined in sec_368 and iv p10 on the date of the merger the fair_market_value of the assets of controlled will exceed the sum of its liabilities plus the amount of liabilities if any to which its assets are subject q10 controlled is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 r10 controlled merger sub merger partner and the shareholders of controlled will pay their respective expenses if any incurred in connection with the merger s10 the payment of cash in lieu of fractional shares of merger partner stock is solely for the purpose of avoiding the expense and inconvenience to merger partner of issuing fractional shares and does not represent separately bargained-for consideration the total cash consideration that will be paid in the transaction to the controlled shareholders instead of issuing fractional shares of merger partner stock will not exceed m percent of the total consideration that will be issued in the transaction to the controlled shareholders in exchange for their shares of controlled stock the fractional share interests of each controlled shareholder will be aggregated and no controlled shareholder of record will receive cash in an amount equal to or greater than the value of one full share of merger partner stock rulings the upstream mergers based solely on the information and representations submitted we rule as follows on each upstream_merger 1a each upstream_merger will be treated as a complete_liquidation under sec_332 sec_332 and sec_1_332-2 2a no gain_or_loss will be recognized by the upstream_merger parent on its deemed receipt of the upstream_merger subsidiary’s assets and the deemed assumption_of_liabilities sec_332 3a no gain_or_loss will be recognized by the upstream_merger subsidiary on the deemed_distribution of its assets to and deemed assumption_of_liabilities by the upstream_merger parent sec_336 and sec_337 4a except as provided in sec_334 which requires a fair_market_value basis under certain circumstances the upstream_merger parent’s basis in each asset deemed received from the upstream_merger subsidiary in the plr-123025-07 upstream_merger will be the same as the basis of that asset in the hands of the upstream_merger subsidiary immediately before the upstream_merger sec_334 5a the upstream_merger parent’s holding_period in each asset deemed received from the upstream_merger subsidiary in the upstream_merger will include the period during which that asset was held by the upstream_merger subsidiary sec_1223 6a the upstream_merger parent will succeed to and take into account as of the close of the effective date of the upstream_merger the items of the upstream_merger subsidiary described in sec_381 subject_to the conditions and limitations specified in sec_381 sec_382 sec_383 and sec_384 and the regulations thereunder sec_381 and sec_1_381_a_-1 the cross-chain mergers based solely on the information and representations submitted we rule as follows on each cross-chain merger 1b provided that the cross-chain merger qualifies as a statutory merger under applicable law the merger of the cross-chain merger subsidiary into the cross-chain merger llc will qualify as a statutory merger for purposes of sec_368 and the transaction will qualify as a reorganization under sec_368 controlled and the cross-chain merger subsidiary will each be a_party_to_a_reorganization under sec_368 2b no gain_or_loss will be recognized by the cross-chain merger subsidiary on the transfer of its assets to the cross-chain merger llc solely in constructive exchange for shares of controlled stock and the assumption by the cross-chain merger llc of the liabilities of the cross- chain merger sub sec_357 and sec_361 3b no gain_or_loss will be recognized by controlled on the receipt by the cross-chain merger llc of the assets of the cross-chain merger subsidiary in constructive exchange for controlled common_stock sec_1032 4b the basis of each asset received by the cross-chain merger llc will equal the basis of that asset in the hands of the cross-chain merger subsidiary immediately before its transfer sec_362 5b the holding_period of each asset received by the cross-chain merger llc from the cross-chain merger subsidiary will include the period during which the cross-chain merger subsidiary held that asset sec_1223 6b controlled will succeed to and take into account as of the close of the effective date of the cross-chain merger the items of the cross-chain plr-123025-07 merger subsidiary described in sec_381 subject_to the conditions and limitations specified in sec_381 sec_382 sec_383 and sec_384 and the regulations thereunder sec_381 and sec_1_381_a_-1 7b no gain_or_loss will be recognized by the cross-chain merger parent on the constructive exchange of its stock in the cross-chain merger subsidiary solely for stock in controlled sec_354 8b the aggregate basis in the controlled stock held by cross-chain merger parent after the cross-chain merger will be i increased by the cross- chain parent’s basis in its cross-chain merger subsidiary stock and ii decreased by the amount of any excess_loss_account in such stock immediately before the cross-chain merger sec_358 sec_1_358-2 and sec_1_1502-19t 9b the holding_period of the controlled stock deemed received by the cross-chain merger parent in the cross-chain merger will include the holding_period of the cross-chain merger subsidiary stock surrendered in exchange therefor provided the cross-chain merger subsidiary stock is held as a capital_asset on the effective date of the cross-chain merger sec_1223 sub exchange based solely on the information and representations submitted we rule as follows on the sub exchange 1c no gain_or_loss will be recognized by sub on the sub exchange sec_351 and sec_357 revrul_2003_51 c b 2c the basis of the sub stock deemed received by sub will be the same as the basis of the assets exchanged therefor reduced by any assumed_liabilities not described under sec_357 sec_358 and d 3c no gain_or_loss will be recognized by sub on the receipt of assets from sub in constructive exchange for sub stock sec_1032 4c the basis of each asset received by sub will equal the basis of that asset in the hands of sub immediately before the sub exchange sec_362 5c the holding_period of each asset received by sub in the sub exchange will include the period during which sub held that asset sec_1223 the contributions and distributions based solely on the information and representations submitted we rule as follows on each contribution and its respective distribution plr-123025-07 1d each contribution followed by its respective distribution will be a reorganization within the meaning of sec_368 each distributing and controlled will be a_party_to_a_reorganization within the meaning of sec_368 2d no gain_or_loss will be recognized by distributing on the contribution sec_357 sec_357 and sec_361 3d no gain_or_loss will be recognized by controlled on the receipt of assets from distributing in exchange for actual or deemed-received controlled stock sec_1032 4d the basis of each asset received by controlled will equal the basis of that asset in the hands of distributing immediately before its transfer sec_362 5d the holding_period of each asset received by controlled will include the period during which distributing held that asset sec_1223 6d no gain_or_loss will be recognized by distributing on the distribution of its stock in controlled to the shareholder of distributing sec_361 7d no gain_or_loss will be recognized by and no amount will be includible in the income of the shareholder of distributing on the receipt of stock of controlled sec_355 8d sec_355 will not treat as other_property any part of the controlled stock actually or deemed issued by controlled to distributing in exchange for any intellectual_property rights transferred to controlled in the contribution 9d the aggregate basis of the stock of distributing and controlled in the hands of distributing’s shareholder immediately after the distribution will equal the shareholder’s aggregate basis in the distributing stock held immediately before the distribution such aggregate basis will be allocated between the distributing stock and the controlled stock in proportion to the fair_market_value of each in accordance with sec_1 a sec_358 b 10d the holding_period of the controlled stock received by distributing’s shareholder will include the holding_period of the distributing stock on which the distribution is made provided that such distributing stock is held as a capital_asset on the date of the distribution sec_1223 11d earnings_and_profits will be allocated between distributing and controlled in accordance with sec_312 sec_1_312-10 and sec_1_1502-33 distribution based solely on the information and representations submitted we rule as follows on distribution plr-123025-07 1e no gain_or_loss will be recognized by distributing on the distribution of its stock in controlled to the shareholder of distributing sec_355 2e no gain_or_loss will be recognized by and no amount will be includible in the income of the shareholder of distributing on the receipt of stock of controlled in distribution sec_355 3e the aggregate basis of the stock of distributing and controlled in the hands of distributing 3’s shareholder immediately after distribution will equal the shareholder’s aggregate basis in the stock of distributing held immediately before distribution such aggregate basis will be allocated between the distributing stock and the controlled stock in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b 4e the holding_period of the controlled stock received by distributing 3’s shareholder will include the holding_period of the distributing stock on which the distribution is made provided that such distributing stock is held as a capital_asset on the date of distribution sec_1223 5e earnings_and_profits will be allocated between distributing and controlled in accordance with sec_312 sec_1_312-10 and sec_1 f external distribution based solely on the information and representations submitted we rule as follows on the external distribution 1f no gain_or_loss will be recognized by distributing on the distribution of its stock in controlled to the distributing shareholders sec_355 2f except to the extent required under sec_897 with respect to foreign shareholders of distributing who own or owned during the five years preceding the external distribution more than five percent of the fair_market_value of the distributing common_stock no gain_or_loss will be recognized by and no amount will be includible in the income of the distributing shareholders on the receipt of controlled stock in the external distribution sec_355 3f earnings_and_profits will be allocated between distributing and controlled under sec_312 sec_1_312-10 and sec_1_1502-33 4f payments made by distributing or controlled pursuant to the working_capital adjustment or the indemnity agreements regarding items that i relate to periods ending on or before the external distribution and ii will not become fixed and ascertainable until after the external distribution will be treated as occurring immediately before the external distribution see 344_us_6 plr-123025-07 5f except in the case of a distributing shareholder who recognizes gain_or_loss under sec_897 the aggregate basis of the stock of distributing and controlled in the hands of each distributing shareholder immediately after the external distribution will equal such shareholder’s aggregate basis in the stock of distributing immediately before the external distribution such aggregated basis will be allocated between the distributing stock and the controlled stock in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 6f except in the case of a distributing shareholder who recognizes gain_or_loss under sec_897 the holding_period of the controlled stock received by a distributing shareholder in the external distribution will include the holding_period of the distributing stock on which the distribution was made provided that such distributing stock is held as a capital_asset on the date of the external distribution sec_1223 7f repurchases of stock occurring before the external distribution pursuant to the repurchase program the distributing pre-distribution redemptions will not be treated as direct or indirect acquisitions of stock in applying sec_355 and will not have any effect on the determination of whether there has been an acquisition of a 50-percent_or_greater_interest in a distributing controlled distributing or distributing ie the distributing pre-distribution redemptions will not affect the determination of the percentage of the total combined voting power or value of the stock of a distributing controlled distributing or distributing acquired within the meaning of sec_355 8f for purposes of sec_355 each controlled shareholder that is entitled to 9f receive cash in lieu of fractional shares of merger partner stock in the merger will be treated as receiving such fractional shares of merger partner stock in the merger and then disposing of such shares in transactions that are not taken into account in applying sec_355 in applying sec_355 the methodology of the example in the legislative_history to sec_355 is applicable to the merger for purposes of testing a distribution distribution and the external distribution under sec_355 and applies separately with respect to each of the vote test and the value test of that provision see s rep no pincite see also h_r conf_rep no pincite- ie for purposes of determining the size of acquisitions of controlled stock that occur pursuant to the merger sec_355 will apply such that any acquisition of controlled stock by merger partner pursuant to the merger will not be taken into account for purposes of sec_355 to the extent that the percentage of the controlled stock owned directly or indirectly by each person owning controlled stock immediately before the merger does not decrease for these plr-123025-07 purposes sec_318 will apply in determining whether a person holds controlled stock except that sec_318 will apply without regard to the phrase percent or more in value sec_355 10f the continuation of the membership of the merger partner board_of directors will not be taken into account in applying sec_355 11f the designation of the members of the controlled board_of directors will not be taken into account in applying sec_355 12f in applying sec_1_355-7 safe_harbor vii sec_1_355-7 safe_harbor viii and sec_1_355-7 safe_harbor ix to acquisitions of merger partner stock following the merger merger partner will be treated as controlled and an acquisition of stock in merger partner will be treated as an acquisition of stock in controlled to the extent such acquirer of merger partner stock would be deemed to hold stock in controlled under sec_355 13f the prior existence of the merger partner agreements or actions taken pursuant thereto will not cause an acquirer of merger partner stock pursuant to the exercise of an option or other right after a termination to be treated as part of a coordinating group for purposes of applying sec_1_355-7 safe_harbor viii merger based solely on the information and representations submitted we rule as follows on the merger 1g the merger will qualify as a reorganization under sec_368 the reorganization will not be disqualified because voting_stock of merger partner is used in the merger sec_368 controlled merger partner and merger sub each will be a_party_to_a_reorganization under sec_368 2g no gain_or_loss will be recognized by merger sub on the transfer of its assets to controlled in constructive exchange for controlled stock and the assumption by controlled of related liabilities sec_361 and sec_357 3g no gain_or_loss will be recognized by controlled on its receipt of assets of merger sub in constructive exchange for controlled stock sec_1032 4g no gain_or_loss will be recognized by merger partner on its receipt of controlled stock in constructive exchange for merger sub stock sec_354 5g the basis controlled will have in each merger sub asset received in the merger will equal the basis of that asset in the hands of merger sub immediately before the exchange sec_362 plr-123025-07 7g 6g the holding_period controlled will have for each merger sub asset will include the period during which merger sub held that asset sec_1223 immediately after the merger merger partner’s basis in the stock of controlled will equal the sum of a merger partner’s basis in the stock of merger sub immediately before the merger and b controlled 1’s net asset basis within the meaning of sec_1_1502-31 sec_1_358-6 and sec_1_1502-31 8g the holding_period merger partner will have in the stock of controlled attributable to the stock of merger sub will include the period during which merger partner held the stock of merger sub sec_1223 9g no gain_or_loss will be recognized by a controlled shareholder on the exchange of controlled common_stock solely for merger partner common_stock including any fractional share interest to which the shareholder would be entitled sec_354 10g the aggregate basis in the hands of a controlled shareholder of the merger partner common_stock received in the transaction including any fractional share interest to which the shareholder would be entitled will equal the aggregate basis of the controlled common_stock exchanged therefor sec_358 11g the holding_period a controlled shareholder will have for merger partner common_stock received in the transaction including any fractional share interest to which the shareholder would be entitled will include the holding_period in the controlled common_stock exchanged therefor provided the controlled common_stock is a capital_asset in the controlled shareholder’s hands on the date of the exchange sec_1223 12g if cash is received by a controlled shareholder as a result of the sale of a fractional share of merger partner stock by the distribution agent on behalf of the shareholder the shareholder will recognize gain_or_loss measured by the difference between the amount of cash received and the shareholder’s basis in the fractional share sec_1001 if the fractional share interest is a capital_asset in the hands of the controlled shareholder the gain_or_loss will be capital_gain or loss subject_to the provisions and limitations of subchapter_p of chapter of the code sec_1221 and sec_1222 caveats we express no opinion about the tax treatment of the proposed transactions under other provisions of the code and regulations or the tax treatment of any condition existing at the time of or effects resulting from the proposed transactions that are not specifically covered by the above rulings in particular no opinion is expressed regarding plr-123025-07 i whether a distribution distribution or the external distribution satisfies the business_purpose requirement of sec_1_355-2 ii whether a distribution distribution or the external distribution is used principally as a device for the distribution of the earnings_and_profits of the distributing_corporation or the controlled_corporation see sec_355 and sec_1_355-2 iii whether a distribution distribution or the external distribution and an acquisition or acquisitions are part of a plan or series of related transactions under sec_355 iv the federal_income_tax consequences of the intercompany debt restructuring v whether the transfer of any intellectual_property rights in contribution constitutes a transfer of property see revrul_69_156 c b vi whether any entity described as a disregarded_entity actually qualifies as a disregarded_entity under sec_301_7701-3 vii the federal_income_tax consequences of payments made in continuing transactions between distributing and any member of its consolidated_group and controlled viii whether sec_1_355-7 safe_harbor viii applies to any acquisition of merger partner stock pursuant to the exercise of a merger partner option ix the consequences to any person under sec_897 as a result of the transactions described above including but not limited to i whether any gain is recognized under sec_897 and ii whether distributing was at any time a united_states_real_property_holding_corporation during the five-year period immediately preceding the date of the external distribution x the consequences under sec_367 to any transaction described above procedural statements this ruling letter is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent 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 plr-123025-07 requirement by attaching a statement to their return that provides the date and control number of the letter_ruling 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 richard k passales richard k passales senior counsel branch associate chief_counsel corporate cc