department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division nov uniform issue list se ter rast legend taxpayer individual a ira b sep ira c ira account d sep-ira account e account f financial_institution g trust h individual amount amount amount state j - page of dear this letter is in response to a request for a letter_ruling dated date as modified and supplemented with additional information dated august september and date and date from your authorized representative in which you have applied for a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code code regarding the distributions of amount and amount collectively amount from your former spouse’s individual_retirement_account ira b and simplified_employee_pension plan sep-ira c respectively the following facts and representations have been submitted under penalty of perjury in support of the rulings requested taxpayer age at the time of the distribution of amount from ira b and amount from sep-ira c collectively amount asserts that her failure to accomplish a rollover within the 60-day period prescribed by sec_408 of the code was due to the actions of her financial advisor individual and financial_institution g and her depressed condition following the death of her spouse which adversely impacted her ability to manage her financial affairs at the time of the distributions amount remains in account f and has not been used for any purpose in june of individual a named taxpayer as individual a advised their financial advisor individual taxpayer is the surviving_spouse of individual a who maintained both ira b an individual_retirement_account under sec_408 of the code and sep-ira c a simplified_employee_pension plan under sec_408 of the code with financial_institution g on september the spousal beneficiary of his ira b and sep-ira c on march taxpayer and individual a adopted trust h a family_trust under the law of state j with financial_institution g that they had adopted trust h individual a also signed forms prepared by the financial advisor that established trust h as the new named beneficiary of ira b and sep-ira c individual a passed away on _ soon thereafter taxpayer informed individual she would november like to have her financial affairs simplified in march individual prepared forms which authorized the transfer of amount from ira b to account d and amount from sep-ira c to account e which were ira and sep-ira accounts respectively however individual also included a letter of authorization to transfer funds from the newly created accounts d and e to account f a non-ira account in the name of trust h september of effect of signing all of the forms was to effect a complete taxable_distribution of both of her spouse’s iras the documents were prefilled and contained no in an affidavit prepared in taxpayer asserts that she was not aware at the time that the page of individual never explained the effect of instructions other than sign and return signing the documents that transferred all of the ira funds to account f taxpayer told individual that she merely wanted to consolidate the two retirement plans taxpayer believed that if ira b and sep-ira c were in one account there would be a reduction in unnecessary paperwork and in administrative expenses individual had been a financial advisor for taxpayer and her spouse for many years taxpayer relied upon individual to handle this transaction taxpayer did not intend or need to take a distribution from ira b or sep-ira c the transfers were discovered in january and february of when taxpayer received two 1099-r forms showing taxable_distributions of amount sec_1 and following the death of individual a taxpayer was in depressed state and it is asserted lacked the capacity to appreciate the financial consequences of her actions she did not question the actions of individual the ruling_request is accompanied by a letter from her clinical psychologist evidencing her state of depression article one section b of trust h provides upon the death of one of us the survivor shall continue to act as the primary trustee of this living_trust with full power and authority to deal with any and all of the assets of this trust in any manner that said survivor sees fit except as hereinafter limited as to assets placed in a secondary trust within this living_trust to be known as the credit_shelter_trust and except as otherwise limited under article two of this living_trust article two section a of trust h provides upon the death of either of us the surviving settlor’s share of the net_proceeds of this trust shall remain in the living_trust with the surviving settlor as primary trustee and primary beneficiary our trustee s shall divide the decedent settlor’s share of net_proceeds of this living_trust into separate shares hereinafter referred to as the marital_deduction share and the non-marital share our trustee s may divide community_property in a non pro_rata manner and shall take into account any written_agreement between the settlor providing for a non pro_rata division of their community_property and the effect of such agreement on community_property passing outside the trust article two section b of trust h provides the non-marital share shall be comprised of an amount equal to the largest amount which can pass under this article the non-marital share shall be distributed to a credit_shelter_trust to be held and administered as follows the survivor of us shall be the trustee of the credit_shelter_trust and during the surviving settlor’s lifetime this trust shall be administered for the benefit of the surviving_spouse as hereinafter provided page of article two section c of trust h provides the marital_deduction share shall be comprised of the net_proceeds remaining after the above provisions are complied with and shall be more particularly described as the qualified terminable_interest trust hereinafter qtip to be administered as follows during the surviving spouse’s lifetime the trustee s shall pay to or for the benefit of the surviving_spouse the qtip income arising from the trust estate in convenient installments but not less frequently than annually article three section c of trust h provides during our joint lifetimes we may revoke the trust with regard to our community_property with respect to the separate_property of either of us either of us may revoke the trust as to his or her separate_property after the death of the first of us the surviving settlor may revoke the trust in whole or in part upon revocation the trustee s shall deliver the trust property to the surviving settlor based on the above facts and representations you request the following rulings with respect to taxpayer the distribution of amount sec_1 and from ira b and sep-ira c respectively are eligible rollover distributions under sec_408 of the code that the internal_revenue_service service waive the 60-day rollover requirement contained in sec_408 a of the code with respect to the distribution of amount with respect to your ruling requests sec_408 of the code provides that except as otherwise provided in sec_408 of the code any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if - i the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or ii the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such page of individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 of the code sec_408 of the code provides that sec_408 of the code does not apply to any amount described in sec_408 of the code received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 of the code from an ira which was not includible in gross_income because of the application of sec_408 of the code sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the rollover provisions of sec_408 of the code do not apply to any amount required to be distributed under sec_408 of the code on date final income_tax regulations regulations were published in the federal_register with respect to code sec_401 and sec_408 see also 2002_19_irb_852 date sec_1_408-8 question and answer of the regulations provides that the surviving_spouse of an ira owner may elect to treat the spouse’s entire_interest as a beneficiary in an individual's ira as the spouse’s own ira the sole beneficiary of the ira and have an unlimited right to withdraw amounts from the ira if a_trust is named as beneficiary of the ira this requirement is not satisfied even if the spouse is the sole beneficiary of the trust in order to make this election the spouse must be the preamble to the regulations provides in relevant part that a surviving_spouse who actually receives a distribution from a deceased spouse's ira is permitted to roll that distribution over into his her own ira even if the spouse is not the sole beneficiary of the deceased’s ira as long as the rollover is accomplished within the requisite 60-day period a rollover may be accomplished even if ira assets pass through either a_trust and or an estate with respect to your initial ruling_request individual a had named trust h as beneficiary of his ira b and sep-ira c taxpayer is individual a’s surviving_spouse and initially was a co-trustee of trust h taxpayer became the sole successor trustee of trust h upon the death of individual a under the terms of trust h taxpayer has the power and authority and absolute right to revoke trust h thus taxpayer could have revoked trust h and caused the assets of page of said trust h including the proceeds of ira b and sep-ira c to pass to taxpayer herself taxpayer then would have been able to roll over the distributions to one or more iras set up and maintained in her own name generally if the proceeds of a decedent’s ira are payable to either a_trust or an estate or both and are paid to the trustee of the trust who then pays them to the decedent’s surviving_spouse as the beneficiary of the trust the surviving_spouse shall be treated as having received the ira proceeds from the trust and not from the decedent accordingly such surviving_spouse in general shall not be eligible to roll over the distributed ira proceeds into her own ira however the general_rule will not apply in a case where the surviving_spouse is the sole trustee of the decedent's trust has the sole authority to revoke or terminate the trust and upon revocation or termination has the sole authority and discretion under the trust language to pay the ira proceeds to herself surviving_spouse will be treated as having received the ira assets directly from the ira or iras and not from the trust as a result the surviving_spouse may then roll over the distributed ira amounts into an ira set up and maintained in her name in such a case the we note that under the facts stated above the provisions of trust h gave taxpayer the right to receive all of the principal of ira b and sep-ira c no third party had any power or authority to prevent taxpayer from receiving ira b and sep-ira c under this set of facts we believe it is appropriate to treat taxpayer as the payee or distributee of ira b and sep-ira c which subsequently were re-styled ira account d and sep-ira account e respectively for purposes of sec_408 and sec_408 of the code thus under the facts of this case taxpayer would have been able to withdraw these funds as eligible rollover distributions and roll them into one or more iras set up and maintained in her name therefore with respect to ruling_request we conclude that the distributions of amount sec_1 and were eligible rollover distributions within the meaning of sec_408 of the code with respect to your second ruling_request sec_408 of the code provides that the secretary may waive the 60-day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code page of revproc_2003_16 r b date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 of the code the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented and the documentation submitted by taxpayer is consistent with her assertion that her failure to accomplish a timely rollover of amount was due to the actions of individual and financial_institution g and her failure to understand the consequences of the actions taken by individual due to her depressed state following the death of her spouse which precluded her from completing timely rollovers of the distributions described above we have concluded above that the above described distributions of amount sec_1 and constituted eligible rollover distributions under sec_408 therefore with respect to your second ruling_request pursuant to code sec_408 the service hereby waives the 60-day rollover requirement with respect to the distribution of amount from ira b ira account d and amount from sep- ira c sep-ira account e taxpayer is granted a period of days as measured from the date_of_issuance of this letter_ruling to contribute amount or any part thereof into a rollover ira provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contribution the contribution of amount or any part thereof into one or more iras set up and maintained in the name of taxpayer will be considered a rollover_contribution within the meaning of sec_408 of the code this ruling does not authorize the rollover of amounts that either are or were required to be distributed by sec_408 of the code with respect to calendar years beginning with calendar_year if any no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent page of a copy of this letter_ruling has been sent to your authorized representative pursuant to a power_of_attorney on file in this office this ruling please contact if you wish to inquire about at identification_number - sincerely yours carlin a watkins manager employee_plans technical group enclosures deleted copy of this letter notice of intention to disclose notice cc


department of the treasury i n t e r n a l r e v e n u e s e r v i c e w a s h i n g t o n d c date c h i e f c o u n s e l number info release date genin-149451-09 uil ---------------------------- ----------------------- --------------------------------------------------- ------------------------------------------ ------------------------ dear ----------------- i am responding to your letter dated date which you had addressed to another division of the irs you had inquired about the rules of deductibility of charitable_contributions made by credit cards sec_170 of the internal_revenue_code code provides that a deduction is allowed for any charitable_contribution made during that taxable_year sec_170 of the code defines a charitable_contribution as a gift or donation to a recognized charitable entity revrul_78_38 1978_1_cb_67 provides that when a contribution is made to a qualified charity by credit card it is deductible in the year the charge is made regardless of when the creditor is paid see also 55_tc_753 in order to substantiate your contribution you must maintain adequate_records to show that you made the contribution for contributions by credit cards which are considered similar to a cash contribution you must keep the credit card statement that shows the name of the charitable_organization the amount of the contribution and the date of the contribution genin-149451-09 i hope this information is helpful if you have any additional questions please contact -----------------at -------------------- sincerely christopher f kane branch chief branch income_tax accounting


internal_revenue_service number release date index number ------------------ ----------------------------- ----------------------------- ------------------------------- - department of the treasury washington dc third party communication none date of communication n a person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc tege eb hw plr-125738-06 date date legend employer ------------------------------------------------------------------------------------------------- ----------------------- ------------------------------------------ ------------------------------ trust plan dear ----------- this responds to your letter of date and subsequent correspondence of date and date requesting rulings concerning the proper federal_income_tax treatment under sec_106 of the internal_revenue_code code of retiree health benefits provided to eligible employees their spouses and dependents employer proposes to establish a_trust for the benefit of eligible retiring employees their spouses and dependents the trust funds will be used to pay for retiree health benefits payable under the plan under the plan retiree health benefits are limited to employees who regularly work hours or more per week and who meet a day waiting_period coverage under the plan will be automatic for eligible employees and an eligible_employee cannot elect in or out of coverage employer will contribute to the trust amounts as specified in the plan or by resolution of the employer no other person will be permitted to make contributions the employer’s contribution will include the following discretionary contributions to be made by the employer on behalf of all participating employees contributions of all or a portion of employees’ accumulated and unused vacation and sick leave upon retirement and contributions of all or a portion of employees’ annual excess vacation and sick leave that would otherwise be forfeited or paid out at year end in accordance with the plan’s procedures and prior to the beginning of each plan_year the employer will designate plr-125738-06 the amounts for the discretionary employer contributions to be contributed to the trust and the percentage or fixed amount of the vacation and sick leave to be contributed to the trust also the employer will in its sole discretion establish a contribution amount applicable to vacation and sick leave accrued prior to the effective date of the plan all contribution amounts will be determined in the sole discretion of the employer and under no circumstances will employees be permitted to decide the discretionary employer contributions to be contributed to the trust or the amount or percentage of their vacation and sick leave to be contributed to the trust the plan provides that under no circumstance may the retired eligible_employee or the retired eligible employee’s spouse or dependents receive any unused amounts at any time in cash or other_benefits following the participant’s death unused amounts shall continue to carryover for the benefit of the participant’s spouse and dependents after the death of the surviving_spouse and dependents any amounts not applied to reimburse medical_expenses will be forfeited sec_61 of the code and sec_1_61-21 of the income_tax regulations provide that except as otherwise provided in subtitle a gross_income includes compensation_for services including fees commissions fringe_benefits and similar items sec_106 of the code provides that the gross_income of an employee does not include employer-provided coverage under an accident_or_health_plan sec_1_106-1 of the regulations states that the gross_income of an employee does not include contributions which his employer makes to an accident_or_health_plan for compensation through insurance or otherwise to the employee for personal injuries or sickness incurred by the employee the employee’s spouse or the employee’s dependents as defined in sec_152 of the code the employer may contribute to an accident_or_health_plan either by paying the premium on a policy of accident_or_health_insurance covering one or more of the employees or by contributing to a separate trust or fund which provides accident or health benefits directly or through insurance to one or more of the employees however if the insurance_policy trust or fund provides other_benefits in addition to accident or health sec_106 applies only to the portion of the contributions allocable to accident or health benefits sec_105 provides that except as otherwise provided in sec_105 amounts received by an employee through accident_or_health_insurance for personal injuries or sickness shall be included in gross_income to the extent such amounts are attributable to contributions by the employer which were not includible in the gross_income of the employee or are paid_by the employer sec_105 states that except in the case of amounts attributable to and not in excess of deductions allowed under sec_213 relating to medical_expenses for any prior taxable_year gross_income does not include amounts referred to in subsection a plr-125738-06 if such amounts are paid directly or indirectly to the taxpayer to reimburse the taxpayer for expenses_incurred by the taxpayer for the medical_care as defined in sec_213 of the taxpayer or the taxpayer's spouse or dependents as defined in sec_152 sec_1_105-2 of the regulations provides that only amounts that are paid specifically to reimburse the taxpayer for expenses_incurred by the taxpayer for the prescribed medical_care are excludable from gross_income thus sec_105 does not apply to amounts that the taxpayer would be entitled to receive irrespective of whether or not the taxpayer incurs expenses for medical_care part i of notice_2002_45 2002_2_cb_93 describes the tax treatment of health reimbursement arrangements hras the notice explains that a tax-favored hra is an arrangement that is paid for solely by the employer and not pursuant to a salary reduction election or otherwise under a sec_125 cafeteria_plan reimburses the employee for medical_care expenses as defined in sec_213 incurred by the employee or by the employee’s spouse or dependents and provides reimbursements up to a maximum dollar amount with any unused portion of that amount at the end of the coverage period carried forward to subsequent coverage periods part iv of notice_2002_45 emphasizes that employer contributions to an hra may not be attributable to salary reduction or otherwise provided under a sec_125 cafeteria_plan an accident_and_health_plan funded pursuant to salary reduction is not an hra and is subject_to the rules under sec_125 see also revrul_2002_41 2002_2_cb_75 revrul_2005_24 2005_1_cb_892 revrul_2006_36 2006_36_irb_353 under sec_125 unused contributions at the end of a coverage period may generally not be carried forward and used in subsequent coverage periods revrul_75_539 1975_2_cb_45 describes two labor contracts contract a provides that upon retirement an employee will receive a portion of accumulated unused sick leave credits as a cash payment or at the election of the employee the payment may be applied to continue the employee’s participation in the employer’s health plan contract b provides that the value of a portion of the accumulated unused sick leave credits will be used to pay for continued participation in the employer’s health plan revrul_75_539 holds that under contract a the value of unused accumulated sick leave credits used to continue health coverage is constructively received by the retired employee under sec_451 of the code and therefore is includible in the retired employee’s gross_income under contract a the amount of the premium payments is considered an employee contribution out of salary and not a contribution by the employer under sec_106 of the code however under contract b the value of unused accumulated sick leave credits which may not be received in cash is not constructively received by the retired employee but is a contribution by the employer to the employer’s health plan that is excludable from the retired employee’s gross_income under sec_106 of the code plr-125738-06 rev_rul describes a health_reimbursement_arrangement situation of the ruling states that when an employee retires the employer automatically and on a mandatory basis as determined under the plan contributes an amount to the reimbursement plan equal to the value of all or a portion of the retired employee’s accumulated unused vacation and sick leave relying on revrul_75_539 the ruling concludes that the reimbursement plan described in situation is an hra that meets the requirements for tax-favored treatment based on the trust and plan as submitted on date and as subsequently amended by submissions dated date and date and on the authorities cited above we conclude that employer contributions paid to trust and payments made from trust which are used exclusively to pay for eligible medical_care expenses of retired employees their spouses and dependents are excludable from the gross_income of retired employees and retired employees’ spouses and dependents under sec_106 and sec_105 of the code no opinion is expressed as to the federal tax consequences of the transaction under any other section of the code or statute other than those specifically stated above this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely harry beker chief health and welfare branch office of division counsel associate chief_counsel tax exempt government entities


number release date id office uilc cca-291306-09 ---------- from ----------------- sent to ------------------ cc ---------------------------- subject ric arguments --------- -------- although i have not studied these issues in any depth my initial quick impressions are as follows i believe that revrul_71_197 deals with a capital_gain dividend from a ric not dividend attributable to the ric's stkgs ric dividends even if sourced from stkgs are not capital_gain dividends that were the subject of that ric dividends sourced from stkgs are not capital_gain dividends however is not sufficient to support a conclusion that the ric dividends for the drd under sec_854 the amount of a ric dividend that is treated as a dividend for purposes of the computing the drd is limited to the amount a deduction would have been allowed to the ric under sec_243 determined as if sec_243 applied to dividends received by a ric and after application of sec_246 other than subsection b and 246a as no deduction would be allowed for stkgs the ric dividends sourced from the stkgs do not qualify for the drd hope this provides some help have any additional thoughts me ---------------- i want to think some more about the issues and will get back to you if i if you have any questions or comments please feel free to call or email


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc corp b05-plr-123801-01 date date in re legend distributing controlled state shareholder a shareholder b shareholder c shareholder d business a year a b c plr-123801-01 plr-123801-01 d e f property a property b property c property d property e this responds to your letter dated date in which rulings are requested regarding the federal_income_tax consequences of a proposed transaction the information submitted in the request and in subsequent correspondence is summarized below distributing is incorporated in state for federal_income_tax purposes distributing uses a cash_method_of_accounting and files its federal_income_tax returns on the basis of a fiscal taxable_year ending on june distributing is engaged in business a distributing has e shares outstanding of class a voting_stock and f shares outstanding of class b nonvoting_stock the class a stock is equally owned by shareholder a and shareholder c the class b stock is owned by shareholder a shareholder c and their respective trusts in the following proportions shareholder a owns a percent shareholder b a_trust for the benefit of shareholder a owns b percent shareholder c owns c percent and shareholder d a_trust for the benefit of shareholder c owns d percent distributing was incorporated in year financial information has been received plr-123801-01 plr-123801-01 indicating that business a has had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the last five years the shareholders believe that a separation of distributing would resolve irreconcilable shareholder disagreements over the management of business a they also maintain that productivity will be enhanced if each shareholder is able to focus attention and effort on the management and operation of a portion of distributing’s business a accordingly a transaction is proposed to provide for separate ownership and management of the business now conducted by distributing as follows i distributing will form controlled as a wholly owned subsidiary distributing will transfer a portion of the assets of business a including property a and property e to controlled solely in exchange for shares of controlled class a voting common_stock controlled class b nonvoting common_stock and the assumption of controlled liabilities ii distributing will retain a portion of the assets and operations of business a including property b property c and property d iii distributing will distribute all of its controlled stock to shareholder a and shareholder b in exchange for all of the distributing stock of shareholder a and shareholder b the taxpayer has made the following representations with respect to the proposed transaction a b c d the fair_market_value of the controlled stock and other consideration to be received by each shareholder of distributing will be approximately equal to the fair_market_value of the distributing stock surrendered by the shareholder in the exchange no part of the consideration to be distributed by distributing will be received by a security holder as an employee or in any capacity other than that of a security holder of distributing the years of financial information submitted on behalf of distributing is representative of distributing’s present operations and with regard to distributing there have been no substantial operational changes since the date of the last financial statements submitted following the transaction distributing and controlled will each continue independently and with its separate employees the active_conduct of its share of all of the integrated activities of the business conducted by distributing prior to consummation of the transaction e the distribution of the stock or stock and securities of controlled is plr-123801-01 plr-123801-01 carried out for the corporate business_purpose of resolving shareholder disputes and for allowing the shareholders to go their own way the distribution of the stock or stock and securities of controlled is motivated in whole or substantial part by such business purposes there is no plan or intention by the shareholders or security holders of distributing to sell exchange transfer by gift or otherwise dispose_of any of their stock in or securities of either distributing or controlled after the transaction there is no plan or intention by distributing or controlled directly or through any subsidiary_corporation to purchase any of its outstanding_stock after the transaction other than through stock purchases meeting the requirements of sec_4 b of revproc_96_30 there is no plan or intention to liquidate either distributing or controlled to merge either corporation with any other corporation or to sell or otherwise dispose_of the assets of either corporation after the transaction except in the ordinary course of business the total adjusted bases and fair market values of the assets transferred to controlled by distributing each equals or exceeds the sum of the liabilities assumed as determined under sec_357 by controlled 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 no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution of the controlled stock payments made in connection with all continuing transactions if any between distributing and controlled will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv distributing neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the transaction the distribution is not part of a plan or series of related transactions within the meaning of sec_355 pursuant to which one or more persons will acquire directly or indirectly stock possessing percent or more of the total combined voting power of all classes of stock of distributing or controlled or stock possessing percent or more of the total value of all f g h i j k l m n o plr-123801-01 plr-123801-01 classes of stock of distributing or controlled p q distributing controlled and their respective shareholders will each pay their own expenses if any incurred in connection with the proposed transaction 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 distributing based solely on the information submitted and on the representations set forth above we hold as follows the transfer by distributing to controlled of a portion of the assets associated with business a solely in exchange for all of the outstanding controlled stock and the assumption_of_liabilities associated with business a followed by the distribution of all of the controlled stock to shareholder a and shareholder b in exchange for all of their stock in distributing will be a reorganization within the meaning of sec_368 distributing and controlled will each be a_party_to_a_reorganization within the meaning of sec_368 no gain_or_loss will be recognized by distributing upon its transfer of the assets to controlled in exchange for stock and controlled’s assumption_of_liabilities sec_361 and sec_357 no gain_or_loss will be recognized by controlled upon the receipt of the assets of distributing in exchange for the stock of controlled and the assumption_of_liabilities sec_1032 the basis in the assets to be received by controlled will be the same as the basis of such assets in the hands of distributing immediately prior to the transaction b the holding_period of the distributing assets to be received by controlled will include the period during which such assets were held by distributing sec_1223 no gain_or_loss will be recognized to and no amount will be included in the income of shareholder a and shareholder b upon the receipt of the stock of controlled in exchange for all of their distributing stock sec_355 the holding_period of the controlled stock received by shareholder a and shareholder b will include the holding_period of the distributing stock surrendered in exchange therefor provided that such distributing stock is plr-123801-01 plr-123801-01 held as a capital_asset on the date of the exchange sec_1223 as provided in sec_312 proper allocation of earnings_and_profits between distributing and controlled will be made under sec_1_312-10 of the income_tax regulations no gain_or_loss will be recognized to distributing upon the distribution of all of its stock in controlled to shareholder a and shareholder b in exchange for all of their distributing stock sec_361 the basis of the controlled stock in the hands of shareholder a and shareholder b will be the same immediately_after_the_exchange as the basis of the distributing stock surrendered in exchange therefor sec_358 no opinion is expressed about the tax treatment of the transaction under other provisions of the code and the regulations or about the tax treatment of any conditions existing at the time of or effects resulting from the transaction that are not specifically covered by the above rulings this ruling 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 should be attached to the federal_income_tax returns of each of the affected taxpayers involved for the taxable_year in which the transaction covered by this ruling letter is consummated in accordance with the power_of_attorney on file in this office a copy of this letter is being sent to shareholder c president of distributing sincerely yours john moriarty assistant to the branch chief branch office of the associate chief_counsel corporate cc


of f i c e of c h i ef c ou n sel department of the treasury i n t e r n al r e v e n u e s e r v i c e w ashington d c date ---------------------------- - number info release date conex-120901-09 uil 36a the honorable susan collins united_states senate washington dc attention--------------------------- dear senator collins i am responding to your inquiry dated date on behalf of your constituent --- ----------------------- --------------- a retired public school teacher has questions about the making_work_pay_credit and the credit for certain government retirees the american_recovery_and_reinvestment_act_of_2009 the act provides that taxpayers with earned_income in and may be eligible for the making_work_pay_credit sec_1001 of the act in those years the credit is the lesser_of percent of earned_income or dollar_figure for working individuals dollar_figure for married couples filing jointly the credit begins phasing out for taxpayers with modified_adjusted_gross_income over dollar_figure per year for working individuals dollar_figure for married couples filing jointly the act also provides a special dollar_figure credit the retiree credit for certain government retirees the retiree credit is available to taxpayers with retirement unearned_income however a taxpayer with both retirement and earned_income may qualify for both credits taxpayers who qualify for both credits must reduce their making_work_pay_credit by the amount of their retiree credit sec_1001 of the act --------------- asks whether he and his wife are disqualified for the making_work_pay_credit because he does not have earned_income his retirement income and his wife’s earned_income total dollar_figure below the phase out amount for married couples filing jointly ----------------would not qualify for the making_work_pay_credit if he filed a separate_return because he has no earned_income however if --------------- and his wife file jointly they would qualify for the dollar_figure making_work_pay_credit because ------- --------------- also qualifies for the dollar_figure retiree credit he would have to reduce his and conex-120901-09 his wife’s dollar_figure making_work_pay_credit by his dollar_figure retiree credit resulting in a making_work_pay_credit of dollar_figure dollar_figure - dollar_figure under those circumstances the ---------------- jointly would still receive dollar_figure in total credits dollar_figure making_work_pay_credit plus dollar_figure retiree credit i hope this information is helpful please call --------------------at --------------------- or me at --------------------- if you have any questions sincerely george j blaine associate chief_counsel income_tax accounting


number release date internal_revenue_service index number ---------------------------------- --------------------------------------- ---------------------------- ------------------------------ - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------- telephone number --------------------- refer reply to cc psi b02 plr-100909-06 date date --------------- --------------------- --------------------------------------- this responds to a letter dated date and subsequent legend x ----------------------- ---------------- country date dear ------------------ correspondence submitted on behalf of x requesting that the service grant x an extension of time under sec_301_9100-3 of the procedure and administration regulations to elect to be treated as a partnership under sec_301_7701-3 x represents that x is a foreign_entity eligible to elect to be treated as a partnership however x inadvertently failed to timely file a form_8832 entity classification election electing to treat x as a partnership effective date entity for federal_income_tax purposes generally a foreign eligible_entity is treated as an association_taxable_as_a_corporation if all members have limited_liability unless the entity makes an election to be treated otherwise if the foreign eligible_entity has more than one owner it may elect to be treated as a partnership pursuant to the rules in sec_301_7701-3 the information submitted states that x was formed under the laws of country sec_301_7701-3 provides guidance on the classification of a foreign sec_301_9100-1 through provide the standards the sec_301_9100-1 provides that the commissioner may grant a reasonable sec_301_7701-3 provides that an entity classification election must be filed plr-100909-06 on form_8832 and can be effective up to seventy-five days prior to the date the form is filed or up to twelve months after the date on which the form is filed extension of time to make a regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin commissioner will use to determine whether to grant an extension of time to make the election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government conclude that the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect to be treated as a partnership effective date a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose federal tax consequences of the facts described above under any other provision of the code provides that it may not be used or cited as precedent except as specifically set forth above no opinion is expressed concerning the based solely on the information submitted and the representations made we this ruling is directed only to the taxpayer requesting it sec_6110 plr-100909-06 being sent to x’s authorized representative pursuant to a power_of_attorney on file with this office a copy of this letter is sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes