internal_revenue_service number release date index number -------------------------- --------------------------- ----------------------------------- ----------------------------- ------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------- id no -------------- telephone number ---------------------- refer reply to cc corp b06 plr-110956-13 date date legend distributing ------------------------------------------------------------ -------------------------------------------------------------------- distributing ----------------------------------------------- ------------------------ ------------------------------------------------------------ distributing ---------------------------------------------------------- ------------------------------------------------------------ ----------------------------------------- distributing 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-------------------------------------------------------------------------------- dre --------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------ dre ------------------------------------------------------------- ------------------------------------------------------------------ plr-110956-13 llc ------------------------------------------------------------------------------------- ------------------------------------------------------------ ----------------------------------------- llc ------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------- ------------------------------------------------------------ ------------------- llc -------------------------------------------------------------------------- ------------------------------------------------------------------------------------- ------------------------------------------------------------ --------------- newco ---------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------- ------------------------------------------------------------ ------------------ newco ------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- ------------------------------------------- newco --------------------------------------------------------------------------------------------------------------------- ----------------------- ---------------------------------------------------------------- --------- country a country b country c country d country e country f country g country h ---------- -------------- ------------------ ------------ ------------ ----------------------- -------------- ----------- plr-110956-13 state a state b state c state d court business a business b sub business date date aa bb cc dd ee ff gg hh ii jj kk ll -------------- -------------- ----------------- -------------- -------------------------------------------------- --------------------------- ------------------------- -------------------------------- -------------------------- --------------------------- -------- ------ ---- ---- -------- -------- -------- ------ ---- -- ---- -- plr-110956-13 mm nn oo pp qq rr -- ss tt uu vv ww xx yy -------- ------ ------ ------ -- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- -------------------------------------------------------------------- ---- ---- -------- ---------- ---------- -------- -------- dear ----------------- this letter responds to your date letter requesting rulings on certain federal_income_tax consequences of certain proposed transactions defined below the material information provided in that letter and in subsequent correspondence is summarized below the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the materials submitted in support of the request for rulings verification of this information representations and other data may be required as part of the audit process plr-110956-13 moreover this office has not reviewed any information pertaining to and has made no determination regarding whether any distribution occurring as part of the proposed transactions will i satisfy the business_purpose requirement of sec_1_355-2 of the income_tax regulations ii be used principally as a device for the distribution of the earnings_and_profits of the distributing_corporation or the controlled_corporation or both see sec_355 of the internal_revenue_code and sec_1_355-2 or iii be 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 country a entity classified as a corporation for u s federal tax purposes distributing has a single class of stock outstanding which is publicly traded and widely held distributing and its direct and indirect subsidiaries collectively the distributing group conduct various businesses including business a business b and the sub business distributing intends to separate its business b from its other businesses including business a and the sub business the retained businesses through a series of proposed transactions described below collectively the proposed transactions the entities that will conduct business b after the completion of the proposed transactions are the business b group and the entities that will continue to conduct the retained businesses are the remaining group distributing a country b entity classified as a corporation for u s federal tax purposes has two classes of stock outstanding distributing 2’s class a stock the class a shares is directly and wholly owned by distributing distributing 2’s class b stock the class b shares is owned aa percent by distributing and its subsidiaries sub sub and sub and bb percent by sub each share of the class a shares and class b shares has similar economic rights collectively the class a shares represent less than cc percent and the class b shares represent approximately dd percent of the value of all of distributing 2’s issued and outstanding_stock the class b shares are nonvoting distributing directly and wholly owns all the stock of dre a country c entity which directly and wholly owns all the stock of dre a country e entity which directly and wholly owns all the stock of dre a country b entity each of dre dre and dre is disregarded as an entity separate from its owner a disregarded_entity and thus is treated as a branch or division of distributing for u s federal tax purposes dre directly and wholly owns all the stock of distributing a country b entity classified as a corporation plr-110956-13 distributing directly owns all the interests of dre a country g disregarded_entity that is treated as a branch or division of distributing distributing also directly owns uu percent of the stock of sub a country h entity classified as a corporation the remaining stock of sub is directly owned vv percent by dre and ww percent by distributing distributing directly owns all the stock of dre a country e entity and all the stock of dre a country c entity dre directly owns all the stock of dre a country e entity dre directly owns all the stock of dre a country c entity and dre directly owns all of the stock of dre a country f entity each of dre dre dre dre and dre is a disregarded_entity that is treated as a branch or division of distributing dre also directly owns all the stock of sub all the stock of sub and xx percent of the stock of sub the remaining yy percent of the stock of sub is directly owned by sub sub directly owns all the stock of sub each of sub sub sub and sub is a country c entity classified as a corporation sub directly owns all of the stock of distributing a state c_corporation distributing is the common parent of an affiliated_group_of_corporations that files a consolidated u s federal_income_tax return the distributing group distributing directly owns all the interests in dre a state d limited_liability_company that is a disregarded_entity and is treated as a branch or division of distributing dre directly owns all the stock of distributing a country d entity that is classified as a corporation distributing also directly owns all the stock of sub a state a corporation all the stock of sub a state a corporation all the stock of sub a state c_corporation and mm percent of the stock of sub the remaining stock of sub is owned nn percent by sub oo percent by sub and pp percent by dre each of sub sub sub and sub is a subsidiary within the meaning of sec_1_1502-1 in the distributing group distributing is a controlled_foreign_corporation within the meaning of sec_957 cfc controlled a state a corporation is the common parent of an affiliated_group_of_corporations that files a consolidated u s federal_income_tax return the controlled group controlled has a single class of stock outstanding which is owned ee percent by dre ff percent by dre gg percent by sub and hh percent by sub an indirect subsidiary of controlled controlled directly owns all the stock of sub a state b corporation and all the stock of sub a state a corporation sub directly owns all the stock of sub a state a corporation all the stock of sub a state a corporation and all the membership interests of dre a state a limited_liability_company that is a disregarded_entity thus treated as a branch or division of sub dre directly owns all the stock of sub a state a corporation sub directly owns all the stock of sub a state a corporation and all the stock of sub a state a corporation sub directly owns all of the interests in dre a state a limited_liability_company that is a disregarded_entity and is treated as a branch or division of sub sub owns kk percent of the interests in sub a country b entity classified as a corporation and dre owns the remaining ll percent of the interests in sub each plr-110956-13 of sub sub sub sub sub sub and sub is a subsidiary within the meaning of sec_1_1502-1 in the controlled group sub is a cfc llc is state a limited_liability_company that is classified as a partnership for u s federal tax purposes llc has two classes of membership units outstanding sub owns ii percent and distributing and dre collectively own the remaining jj percent of the llc class a common units distributing and dre collectively own all of the llc class b preferred units with respect to each distribution in the controlled distribution distributing split-down controlled distribution the first controlled distribution and controlled distribution the respective distributing corporation’s separate_affiliated_group within the meaning of sec_355 the sag directly engages in business a and the corresponding controlled corporation’s sag directly engages or with respect to a newly organized controlled_corporation will directly engage immediately after the distribution in either business b or the sub business with respect to the country d restructuring the distributing sag directly engages in business b and controlled will directly engage immediately after the distribution in business a proposed transactions the proposed transactions comprise the following steps i ii iii iv distributing will create additional distributable reserves under country a law by revaluing its assets to reflect present fair value following a court application and grant of approval any increase in previously recorded values will be converted into distributable reserves distributing has formed or will form newco a newly organized state a corporation the newco formation certain intercompany debts owed between llc distributing and other members of the remaining group may be eliminated through repayment contribution distribution assumption or set-off sub will sell to newco the llc sale all of its class a common units in llc in exchange for i newco 1’s assumption of a note payable owed by sub to llc and ii an additional note the newco note sub will assign the newco note in repayment of indebtedness owed by sub to sub sub will transfer the newco note to sub sub will distribute the newco note to dre dre will distribute the newco note to dre dre will transfer the newco note to dre to partially repay intercompany indebtedness dre will distribute the newco note to dre and dre will distribute the newco note to distributing plr-110956-13 v vi vii an entity classification election under sec_301_7701-1 et seq to be effective before the controlled distribution defined below will be filed to classify sub as an entity disregarded as separate from its owner thus to be treated as a branch or division of distributing for u s federal tax purposes the sub liquidation after this election sub will be referred to as dre certain intercompany debts owed by controlled and its subsidiaries to other members of the remaining group will be eliminated through repayment contribution distribution or set-off and distributing will contribute certain assets to the capital of controlled the controlled contribution including intercompany debts owed by controlled or its direct or indirect subsidiaries or cash to be used to retire such debts distributing will distribute all of the controlled stock it owns directly or through one or more disregarded entities to distributing the controlled distribution and together with the controlled contribution the controlled spin-off the controlled distribution will involve the following steps a dre and dre will distribute all of their stock in controlled to dre b dre will distribute all of its stock in controlled to dre c dre will transfer all of its stock in controlled to dre d dre will distribute all of its stock in controlled to dre e dre will distribute all of its stock in controlled to distributing f distributing will distribute all of its stock in controlled to dre g dre will distribute a portion of its stock in controlled to dre and will transfer the remaining portion of its stock in controlled to distributing and h dre will transfer all of its controlled stock to distributing step vi may occur after steps vii a -vii e but in any event will occur before step vii f viii distributing will a contribute property to controlled the distributing contribution b transfer all its stock in controlled to the owners of the plr-110956-13 class b shares including distributing and sub in exchange for and complete redemption of all of the class b shares the distributing split- down and c cancel the class b shares the distributing split-down may occur after the controlled distribution defined below but will occur prior to any distributions of stock by distributing to distributing ix x xi xii sub will redeem its shares held by sub each of sub sub and sub will either a convert into a domestic limited_liability_company to be directly and wholly owned by distributing and to be classified as an entity disregarded as separate from distributing b liquidate dissolve or merge under local law with and into distributing or c merge under local law with and into an entity disregarded as separate from distributing this step may occur prior to or subsequent to step viii distributing has formed or will form controlled a newly organized state a corporation distributing will purchase all of the stock of sub from sub and all of the stock of sub from controlled in exchange for the issuance of debt instruments xiii the following steps the country d restructuring will be taken a dre has formed or will form dre a newly organized country d entity which will disregarded as an entity separate from its owner thus a branch or division of distributing for u s federal_income_tax purposes and will transfer a portion of its shares of distributing stock to dre in exchange for common shares of dre b dre has formed or will form llc a newly organized state a limited_liability_company which will be disregarded as an entity separate from its owner thus a branch or division of distributing and will transfer its remaining common shares of distributing stock to llc the llc contribution c distributing has formed or will form controlled a newly organized country d entity that will be classified as a corporation and will transfer the controlled contribution the property utilized in business a and rr percent of its cash cash equivalents and investment_assets to controlled in exchange for the issuance of all of the common shares of controlled and controlled 2’s assumption of debt plr-110956-13 d distributing will transfer the common shares of controlled to dre in exchange for preferred shares of dre e distributing will redeem its common shares held by dre in exchange for its issuance of a debt_instrument the distributing note to dre f dre will redeem its preferred shares held by distributing in exchange for its issuance of a debt_instrument the dre note to distributing g the distributing note and the dre note which will have substantially identical terms will be offset and canceled xiv distributing will contribute directly or through dre the following assets to controlled in exchange for the issuance of controlled stock and controlled 3's assumption of any liabilities distributing owes to llc collectively the controlled contribution a all of its llc class a common units and llc class b preferred units and certain receivables b all the stock of sub and sub c other assets held directly or indirectly by distributing that are utilized in business b and d all of the stock of distributing through the following steps i dre will distribute all of the membership interests of llc to distributing ii controlled has formed or will form llc a state a limited_liability_company which will be disregarded as an entity separate from its owner thus to be treated as a branch or division of controlled iii distributing will transfer all of the llc membership interests to llc llc will issue membership interests to controlled and controlled will issue shares of its stock to distributing and iv llc will be wound up and distribute all of the shares of distributing stock to llc plr-110956-13 xv distributing will distribute all the stock of controlled to distributing through the following steps collectively the controlled distribution a dre will distribute all of its shares of controlled stock to distributing b distributing will distribute all the stock of controlled to dre c dre will distribute all the stock of controlled to dre d dre will distribute all the stock of controlled to dre e dre will transfer all the stock of controlled to dre f dre will distribute all the stock of controlled to dre and g dre will distribute all the stock of controlled to distributing xvi distributing has formed or will form newco a newly organized country a entity that will be classified as a corporation for u s federal tax purposes newco in turn has formed or will form various foreign subsidiaries directly and indirectly owned including newco a country c entity classified as a corporation for u s federal tax purposes newco and or these newly formed subsidiaries will then acquire through transfers distributions or contributions certain stock or relevant_foreign_assets utilized in business b from certain members of the remaining group the foreign acquisitions xvii distributing will contribute the newco note to newco xviii distributing has formed or will form controlled a newly organized state a corporation xix xx xxi controlled will borrow cash from a third-party lender and or issue public debt distributing will transfer to controlled the controlled contribution its stock in controlled and in newco in exchange for cash the issuance of controlled stock and the issuance of controlled securities the controlled securities distributing will transfer a portion of the controlled securities it received in the controlled contribution to llc to repay certain indebtedness it owes to llc and will distribute all of the stock of newco to distributing in addition distributing will distribute the following the first controlled plr-110956-13 distribution to distributing all of the shares of controlled stock all of the remaining controlled securities it received in the controlled contribution and all of the cash it received in the controlled contribution the first controlled distribution will be accomplished through the following steps a distributing will distribute to dre the stock of controlled a portion of the controlled securities the cash it received in the controlled contribution and the stock of newco and b dre will transfer to distributing directly or through one or more disregarded entities the property distributed to it in the preceding step xxii distributing will distribute to distributing the stock of controlled the second controlled distribution the stock of newco the controlled securities distributed to it in the preceding step and the cash it received in the preceding step xxiii controlled a newly organized country a entity classified as a corporation for u s federal tax purposes has been or will be formed outside the remaining group xxiv distributing will transfer all the stock of controlled the stock of newco and the controlled securities it received from distributing in the second controlled distribution to controlled the controlled contribution and controlled will issue all its shares except for the retained stock as defined below if any directly to the shareholders of distributing stock on a pro_rata basis the controlled distribution distributing or some other member of the remaining group will retain controlled shares or options to acquire controlled shares the shares options and any shares acquired by the exercise of the options are referred to as the retained stock xxv controlled will merge with and into distributing with distributing surviving the controlled merger as part of the controlled merger distributing will issue common shares to sub and sub in exchange for their controlled stock xxvi sub will merge with and into distributing with distributing surviving the sub merger in connection with the proposed transactions distributing and or certain of its subsidiaries will enter into various agreements with controlled and or certain of its subsidiaries providing for certain continuing relationships after the separation of business b from the retained businesses including a transition services agreement plr-110956-13 the transition services agreement a tax_matters_agreement a separation agreement an employee matters agreement a shared facility manufacturing agreement the shared facility manufacturing agreement and certain commercial agreements under which distributing and or certain of its subsidiaries and controlled and or certain of its subsidiaries may provide goods services licenses of certain intellectual_property or facilities to each other at either cost cost plus or fair_market_value for a period except as described below not to exceed ss months collectively the continuing arrangements the transition services agreement will include agreements involving obligations that will arise after the proposed transactions and relate to transitional and administrative support services that distributing and its subsidiaries will provide to controlled and its subsidiaries or that controlled and its subsidiaries will provide to distributing and its subsidiaries for an interim period while distributing and controlled establish separate administrative support and corporate service arrangements the services addressed in the transition services agreement may include the following information_technology human resources and labor eg payroll benefits and compensation programs finance and accounting eg accounts_payable processing travel customs cash management advisory merchant procurement corporate cards customer financing advisory treasury administrative support legal environmental_tax and various other corporate services in addition distributing and controlled will enter into a license agreement pursuant to which certain intellectual_property that is used by both the retained businesses and business b will be licensed by the owner of the intellectual_property to the entities conducting the other business es following the proposed transactions the licenses will be on a perpetual irrevocable non-exclusive fully-paid-up royalty- free and worldwide basis subject_to certain limitations on assignability and sublicensing in addition the retained businesses and business b each will be granted a license to use the trade names brand names trademarks and logos of the other business es for up to tt months after the proposed transactions on i sales product and service literature and inventory ii labels brochures displays and letterhead iii street and building signage iv vehicles used by other business es or their contractors or agents and v other materials used in activities in furtherance of the respective business es pursuant to the proposed transactions real_property that historically has been used by both the retained businesses and business b other than the shared facility described directly below will be owned held or leased by the entity that in general is the primary user of the property and leased subleased or licensed for use from such person to the entity or entities conducting the other business es in the case of a few shared headquarters or other primary business facilities for which separate leases are unable to be negotiated with the third-party lessor the sublease of a portion of such plr-110956-13 facilities from the primary user to the other business es may continue for the duration of the current lease_term pursuant to the shared facility manufacturing agreement a subsidiary of distributing and a subsidiary of controlled will enter into an agreement pursuant to which the distributing subsidiary will manufacture and sell to the controlled subsidiary a limited number of products parts or components presently manufactured at a shared facility the shared facility manufacturing agreement will not remain in effect in excess of ss months after the controlled distribution in connection with the shared facility manufacturing agreement controlled will license the business b trademarks and other intellectual_property to the distributing subsidiary engaged in manufacturing business b products parts or components after the controlled distribution as needed for the distributing subsidiary to manufacture and provide labeling for such products under the terms of the manufacturing agreement business b is operated in a number of jurisdictions which require regulatory or other governmental approval prior to a transfer of assets or an equity_interest in a legal entity if the distributing group is not able to obtain the necessary regulatory or governmental approvals to effectuate the transfer of all of the assets of business b or of the equity interests in legal entities that directly engage in business b prior to the controlled distribution the remaining group will hold the business b assets and equity interests that cannot be transferred the retained b business in trust for the benefit of the business b group the business b group will reimburse the remaining group for costs if any related to holding the assets of the retained b business incurred after the controlled distribution and the remaining group will transfer legal ownership of the retained b business to controlled or one of its subsidiaries as soon as the regulatory or governmental approvals can be obtained in no event will the remaining group hold legal ownership of any portion of the retained b business in excess of ss months after the controlled distribution the distributing group is in the process of transferring all contracts exclusively related to business b the business b contracts to the appropriate business b entity or seeking a release from any business b contracts prior to the controlled distribution to the extent that the distributing group cannot transfer or obtain a release from a contract the remaining group may enter into a subcontracting arrangement under which business b will purchase goods or services from the remaining group at cost to satisfy the obligations under the contract further the business b group will indemnify the remaining group for any liability arising from the relevant contract in addition with respect to contracts in which entities conducting the business b and entities conducting the retained businesses are both parties or are otherwise involved other than the continuing arrangements agreements described herein the shared agreements the distributing group is in the process of splitting the plr-110956-13 contracts between the two businesses or separating one of the businesses from such contracts prior to the controlled distribution in no event will the shared agreements continue in excess of ss months after the controlled distribution in addition the remaining group currently provides guarantees or other credit support to members of the business b group the distributing group will make reasonable efforts to sever any and all guarantees provided to the business b group in that timeframe however to the extent severance is not possible the business b group will indemnify the remaining group in order to meet its obligations under certain employee compensation arrangements the distributing group may retain or purchase controlled shares or options to acquire controlled shares the total number of shares of retained stock that will be held by members of the remaining group will not exceed qq percent of the number of controlled shares issued and outstanding at the time of the controlled distribution in addition the retained stock will be disposed of as soon as a disposition is warranted consistent with the business_purpose for retaining the retained stock but in any event the members of the remaining group will dispose_of all shares of retained stock not later than five years after the controlled distribution representations the controlled contribution and the controlled distribution the following representations are made with respect to the controlled contribution and the controlled distribution the five years of financial information submitted for business a as conducted by the distributing sag through distributing represents business a’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the controlled distribution the distributing sag will continue the active_conduct of business a independently and with its separate employees neither business a conducted by the distributing sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the controlled distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the controlled distribution the distributing sag will have been the principal_owner of the goodwill and significant assets of business a and will continue to be the principal_owner following the controlled distribution plr-110956-13 the five years of financial information submitted for the sub business conducted by the controlled sag through sub represents the sub business’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the controlled distribution the controlled sag including distributing as successor to controlled pursuant to the controlled merger will continue the active_conduct of the sub business independently and with its separate employees neither the sub business conducted by the controlled sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the controlled distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the controlled distribution the controlled sag has been the principal_owner of the goodwill and significant assets of the sub business and will continue to be the principal_owner following the controlled distribution the controlled distribution will be carried out to facilitate the controlled distribution the controlled distribution is motivated in whole or substantial part by this corporate business_purpose the controlled distribution will not be used principally as a device for distributing the earnings_and_profits e_p of distributing or controlled or both for purposes of sec_355 immediately after the controlled distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of distributing stock entitled to vote or 50-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 controlled distribution for purposes of sec_355 immediately after the controlled distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of controlled stock entitled to vote or 50-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 controlled distribution or ii attributable to distributions on distributing 1's plr-110956-13 stock_or_securities that were 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 controlled distribution 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 within the meaning of sec_355 in distributing or controlled including any predecessor or successor to any such corporation immediately after the controlled distribution and after applying the attribution_rules of sec_318 pursuant to sec_355 no person will hold a percent-or-greater interest within the meaning of sec_355 in either distributing or controlled who did not hold such interest immediately before the controlled distribution any indebtedness owed by controlled to distributing after the controlled distribution will not constitute stock_or_securities payments made in connection with all continuing transactions following the proposed transactions between distributing and its subsidiaries and controlled and its subsidiaries or distributing as successor to controlled pursuant to the controlled merger and its subsidiaries will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm's length distributing and controlled each will pay its own expenses if any incurred in connection with the controlled contribution and the controlled distribution neither distributing nor controlled accumulated its receivables or made extraordinary payment of its payables in anticipation of the controlled distribution except pursuant to the elimination or reduction of intercompany balances in connection with the proposed transactions the total adjusted bases and the fair_market_value of the assets to be transferred to controlled by distributing in the controlled contribution will each equal or exceed the sum of the liabilities assumed by controlled as determined under sec_357 any liabilities assumed as determined under sec_357 by controlled in the controlled contribution will have been incurred in the ordinary course of business and will be associated with the assets transferred plr-110956-13 the total fair_market_value of the assets transferred to controlled by distributing in the controlled contribution will exceed the sum of i the amount of any liabilities assumed as determined under sec_357 by controlled in connection therewith ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection therewith 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 therewith the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately after the controlled contribution the total fair_market_value of the assets transferred to controlled in the controlled contribution will be equal to or exceed the aggregate adjusted_basis of those assets so transferred no party to the controlled contribution or the controlled distribution will be an investment_company as defined in sec_368 and iv no part of the consideration to be distributed by distributing in the controlled distribution will be received by distributing as a creditor employee or in any capacity other than that of a shareholder of distributing any money property or stock contributed by distributing to controlled in the controlled contribution will be transferred solely in exchange for stock_or_securities in controlled distributing 1’s distribution of the controlled stock to distributing in the controlled distribution will be solely with respect to distributing 2’s ownership of distributing stock neither distributing nor controlled has been or will be a united_states_real_property_holding_corporation within the meaning of sec_897 a usrphc at any time during the five-year period ending on the date of the controlled distribution and neither distributing nor controlled will be a usrphc immediately after the controlled distribution distributing will comply with any applicable notice and filing_requirements set forth in sec_897 and sec_1445 and the regulations thereunder the controlled contribution and the controlled distribution will be undertaken pursuant to a plan_of_reorganization plr-110956-13 no party to the controlled contribution or the controlled distribution is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 other than trade payables between distributing and controlled arising in the ordinary course of business no inter-corporate debt will exist between distributing and controlled at the time or or subsequent to the controlled distribution the distributing contribution and the distributing split-down the following representations are made with respect to the distributing contribution and the distributing split-down the fair_market_value of the controlled common_stock to be received by each distributing class b shareholder will be approximately equal to the fair_market_value of the distributing class b shares surrendered by each shareholder in the distributing split-down the five years of financial information submitted for business a as conducted by the distributing sag through distributing represents business a’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the distributing split-down the distributing sag will continue the active_conduct of business a independently and with its separate employees neither business a conducted by the distributing sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the distributing split-down in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the distributing split-down the distributing sag will have been the principal_owner of the goodwill and significant assets of business a and will continue to be the principal_owner following the distributing split-down the five years of financial information submitted for the sub business conducted by the controlled sag through sub represents the present business operations of the sub business and there have been no substantial operational changes since the date of the last financial statements submitted following the distributing split-down the controlled sag including distributing as successor to controlled pursuant to the controlled merger plr-110956-13 will continue the active_conduct of the sub business independently and with its separate employees neither the sub business conducted by the controlled sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the distributing split-down in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the distributing split- down the controlled sag has been the principal_owner of the goodwill and significant assets of the sub business and will continue to be the principal_owner following the distributing split-down the distributing split-down will be carried out for the corporate business_purpose of facilitating the controlled distribution the distributing split-down is motivated in whole or substantial part by this corporate business_purpose the distributing split-down will not be used principally as a device for distributing the e_p of distributing or controlled or both for purposes of sec_355 immediately after the distributing split-down no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of distributing stock entitled to vote or 50-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 distributing split-down for purposes of sec_355 immediately after the distributing split-down no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of controlled stock entitled to vote or 50-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 distributing split-down or ii attributable to distributions on distributing 2’s stock_or_securities that were 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 distributing split-down the distributing split-down 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 other than persons described in sec_355 will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the plr-110956-13 meaning of sec_355 in distributing or controlled including any predecessor or successor to any such corporation immediately after the distributing split-down and after applying the attribution_rules of sec_318 pursuant to sec_355 no person will hold a percent-or-greater interest within the meaning of sec_355 in either distributing or controlled who did not hold such an interest immediately before the distributing split-down any indebtedness owed by controlled to distributing after the distributing split-down will not constitute stock_or_securities payments made in connection with all continuing transactions following the proposed transactions between distributing and its subsidiaries and controlled and its subsidiaries or distributing as successor to controlled pursuant to the controlled merger and its subsidiaries will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length distributing and controlled each will pay its own expenses if any incurred in connection with the distributing split-down neither distributing nor controlled accumulated its receivables or made extraordinary payment of its payables in anticipation of the distributing split- down except pursuant to the elimination or reduction of intercompany balances in connection with the proposed transactions the total adjusted bases and the fair_market_value of the assets to be transferred to controlled by distributing in the distributing contribution will each equal or exceed the sum of the liabilities assumed by controlled as determined under sec_357 any liabilities assumed as determined under sec_357 by controlled in the distributing contribution will have been incurred in the ordinary course of business and will be associated with the assets transferred the total fair_market_value of the assets transferred to controlled by distributing in the distributing contribution will exceed the sum of i the amount of any liabilities assumed as determined under sec_357 by controlled in connection therewith ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection therewith 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 plr-110956-13 therewith the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately after the distributing contribution the total fair_market_value of the assets transferred to controlled in the distributing contribution will be equal to or exceed the aggregate adjusted_basis of those assets so transferred no party to the distributing contribution or the distributing split-down will be an investment_company as defined in sec_368 and iv no part of the consideration to be distributed by distributing in the distributing split-down will be received by any shareholder of distributing as a creditor or an employee or in any capacity other than that of a shareholder of distributing any money property or stock contributed by distributing to controlled in the distributing contribution will be transferred solely in exchange for stock_or_securities in controlled distributing 2’s transfer of the controlled stock to the distributing class b shareholders in the distributing split-down will be solely with respect to their ownership of the distributing class b shares neither distributing nor controlled has been or will be a usrphc at any time during the five-year period ending on the date of the distributing split-down and neither distributing nor controlled will be a usrphc immediately after the distributing split-down distributing will comply with any applicable notice and filing_requirements set forth in sec_897 and sec_1445 and the regulations thereunder the distributing contribution and the distributing split-down will be undertaken pursuant to a plan_of_reorganization no party to the distributing contribution or the distributing split-down is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 other than trade payables between distributing and controlled arising in the ordinary course of business no inter-corporate debt will exist between distributing and controlled at the time or or subsequent to the controlled distribution the class b shares are properly treated as stock in distributing for federal_income_tax purposes plr-110956-13 the country d restructuring the following representations are made with respect to the country d restructuring viewing the country d restructuring as though distributing will undertake the controlled contribution in exchange for all of the outstanding_stock of controlled followed by its distribution of the controlled stock to distributing or to disregarded entities treated as branches or divisions of distributing the five years of financial information submitted for business b as conducted by the distributing sag represents business b’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the country d restructuring the distributing sag will continue the active_conduct of business b independently and with its separate employees neither business b conducted by the distributing sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the country d restructuring in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the country d restructuring the distributing sag will have been the principal_owner of the goodwill and significant assets of business b and will continue to be the principal_owner following the country d restructuring the five years of financial information submitted for business a conducted by the distributing sag prior to the country d restructuring and that will be conducted by the controlled sag thereafter represents business a’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the country d restructuring the controlled sag will continue the active_conduct of business a independently and with its separate employees neither business a conducted by the distributing sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the country d restructuring in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the country d restructuring the distributing sag has been the principal_owner of the goodwill and significant assets of business a and the controlled sag will be the principal_owner following the country d restructuring plr-110956-13 the country d restructuring will be carried out to facilitate the controlled distribution the country d restructuring is motivated in whole or substantial part by this corporate business_purpose the country d restructuring will not be used principally as a device for distributing the e_p of distributing or controlled or both for purposes of sec_355 immediately after the country d restructuring no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of distributing stock entitled to vote or 50-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 country d restructuring for purposes of sec_355 immediately after the country d restructuring no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of controlled stock entitled to vote or 50-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 country d restructuring or ii attributable to distributions on distributing 3’s stock_or_securities that were 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 country d restructuring the country d restructuring 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 other than persons described in sec_355 will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled immediately after the country d restructuring and after applying the attribution_rules of sec_318 pursuant to sec_355 no person will hold a percent-or-greater interest within the meaning of sec_355 in either distributing or controlled who did not hold such an interest immediately before the country d restructuring any indebtedness owed by controlled to distributing after the country d restructuring will not constitute stock_or_securities plr-110956-13 no intercorporate debt will exist between distributing and its subsidiaries and controlled and its subsidiaries at the time of or subsequent to the country d restructuring other than obligations arising in the ordinary course of business or from the continuing arrangements except as otherwise noted above with respect to the continuing arrangements payments made in connection with all continuing transactions following the proposed transactions between distributing and its subsidiaries and controlled and its subsidiaries will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length distributing and controlled each will pay its own expenses if any incurred in connection with the country d restructuring neither distributing nor controlled accumulated its receivables or made extraordinary payment of its payables in anticipation of the country d restructuring except pursuant to the elimination or reduction of intercompany balances in connection with the proposed transactions the total adjusted bases and the fair_market_value of the assets to be transferred to controlled by distributing in the controlled contribution will each equal or exceed the sum of the liabilities assumed by controlled as determined under sec_357 any liabilities assumed as determined under sec_357 by controlled in the controlled contribution will have been incurred in the ordinary course of business and will be associated with the assets transferred the total fair_market_value of the assets transferred to controlled by distributing in the controlled contribution will exceed the sum of i the amount of any liabilities assumed as determined under sec_357 by controlled in connection therewith ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection therewith 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 therewith the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately after the controlled contribution the total fair_market_value of the assets transferred to controlled in the controlled contribution will be equal to or exceed the aggregate adjusted_basis of those assets so transferred plr-110956-13 no party to the country d restructuring will be an investment_company as defined in sec_368 and iv no part of the consideration to be distributed by distributing in the country d restructuring will be received by distributing as a creditor or an employee or in any capacity other than that of a shareholder of distributing any money property or stock contributed by distributing to controlled in the controlled contribution will be exchanged solely for stock_or_securities in controlled distributing 3’s distribution of the controlled stock to distributing in the country d restructuring will be solely with respect to distributing 4’s ownership of distributing stock each of distributing and controlled will be a controlled_foreign_corporation within the meaning of sec_957 a cfc both before and after the country d restructuring at all times prior to the country d restructuring and immediately thereafter neither distributing nor controlled will have been or will be a passive foreign investment corporation within the meaning of sec_1297 a pfic distributing will be a sec_1248 shareholder within the meaning of sec_1_367_b_-2 with respect to distributing immediately before and after the country d restructuring and will be a sec_1248 shareholder with respect to controlled immediately after the country d restructuring the notice requirements of sec_1_367_b_-1 will be satisfied for the country d restructuring the country d restructuring is not an exchange described in sec_1_367_b_-4 sec_1_367_b_-4 or sec_1_367_b_-4 neither distributing nor controlled will hold any united_states real_property interests as defined in sec_897 immediately before or after the country d restructuring the country d restructuring will not include the transfer of stock in any corporation that has been a u s transferor the transferee foreign_corporation or the transferred corporation with respect to any unexpired gain_recognition_agreement within the meaning of sec_1_367_a_-3 and sec_1_367_a_-8 plr-110956-13 the country d restructuring will be undertaken pursuant to a plan_of_reorganization no party to the country d restructuring is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 the controlled contribution and the controlled distribution the following representations are made with respect to the controlled contribution and the controlled distribution the five years of financial information submitted for business a that will be conducted by the distributing sag through controlled represents business a’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the controlled distribution the distributing sag will continue the active_conduct of business a independently and with its separate employees except for certain transition services to be provided pursuant to the continuing arrangements neither business a conducted by the distributing sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the controlled distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the controlled distribution the distributing sag including controlled will have been the principal_owner of the goodwill and significant assets of business a and will continue to be the principal_owner following the controlled distribution the five years of financial information submitted for business b to be conducted by the controlled sag through distributing represents business b’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the controlled distribution the controlled sag will continue the active_conduct of business b independently and with its separate employees except for certain transition services to be provided pursuant to the continuing arrangements neither business b conducted by the distributing sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the controlled distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout plr-110956-13 the five-year period ending on the date of the controlled distribution the distributing sag including distributing will have been the principal_owner of the goodwill and significant assets of business b and the controlled sag will be the principal_owner following the controlled distribution the controlled distribution will be carried out to facilitate the controlled distribution the controlled distribution is motivated in whole or substantial part by this corporate business_purpose the controlled distribution will not be used principally as a device for distributing the e_p of distributing or controlled or both for purposes of sec_355 immediately after the controlled distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of distributing stock entitled to vote or 50-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 controlled distribution for purposes of sec_355 immediately after the controlled distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of controlled stock entitled to vote or 50-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 controlled distribution or ii attributable to distributions on distributing 4’s stock_or_securities that were 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 controlled distribution 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 other than persons described in sec_355 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 to any such corporation immediately after the controlled distribution and after applying the attribution_rules of sec_318 pursuant to sec_355 no person will hold a percent-or-greater interest within the meaning of sec_355 in either plr-110956-13 distributing or controlled who did not hold such an interest immediately before the controlled distribution any indebtedness owed by controlled and its subsidiaries to distributing and its subsidiaries after the controlled distribution will not constitute stock_or_securities no intercorporate debt will exist between distributing and its subsidiaries and controlled and its subsidiaries at the time of or subsequent to the controlled distribution other than obligations arising in the ordinary course of business or from the continuing arrangements except as otherwise noted above with respect to the continuing arrangements payments made in connection with all continuing transactions following the proposed transactions between distributing and its subsidiaries and controlled and its subsidiaries will be for fair_market_value based on terms and conditions that would be arrived at by the parties bargaining at arm's length distributing and controlled each will pay its own expenses if any incurred in connection with the controlled contribution and the controlled distribution neither distributing nor controlled accumulated its receivables or made extraordinary payment of its payables in anticipation of the controlled distribution except pursuant to the elimination or reduction of intercompany balances in connection with the proposed transactions the total adjusted bases and the fair_market_value of the assets to be transferred to controlled by distributing in the controlled contribution will each equal or exceed the sum of the liabilities assumed by controlled as determined under sec_357 any liabilities assumed as determined under sec_357 by controlled in the controlled contribution will have been incurred in the ordinary course of business and will be associated with the assets transferred the total fair_market_value of the assets transferred to controlled by distributing in the controlled contribution will exceed the sum of i the amount of any liabilities assumed as determined under sec_357 by controlled in connection therewith ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection therewith 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 plr-110956-13 therewith the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately after the controlled contribution the total fair_market_value of the assets transferred to controlled in the controlled contribution will be equal to or exceed the aggregate adjusted_basis of those assets so transferred no party to the controlled contribution or the controlled distribution will be an investment_company as defined in sec_368 and iv no part of the consideration to be distributed by distributing in the controlled distribution will be received by distributing as a creditor or an employee or in any capacity other than that of a shareholder of distributing any money property or stock contributed by distributing to controlled in the controlled contribution will be exchanged solely for stock_or_securities in controlled distributing 4’s distribution of controlled stock to distributing in the controlled distribution will be solely with respect to distributing 1’s ownership of distributing stock neither distributing nor controlled has been or will be a usrphc at any time during the five-year period ending on the date of the controlled distribution and neither distributing nor controlled will be a usrphc immediately after the controlled distribution distributing will comply with any applicable notice and filing_requirements set forth in sec_897 and sec_1445 and the regulations thereunder immediately before the controlled 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_32_irb_6 and as currently in effect sec_1_1502-13 as published by t d further distributing 4’s excess_loss_account if any with respect to controlled will be included in income immediately before the controlled distribution see sec_1_1502-19 the controlled contribution and the controlled distribution will be undertaken pursuant to a plan_of_reorganization plr-110956-13 no party to the controlled contribution or the controlled distribution is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 the controlled contribution and the first controlled distribution the following representations are made with respect to the controlled contribution and the first controlled distribution the five years of financial information submitted for business a as conducted by the distributing sag through controlled represents business a’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the first controlled distribution the distributing sag will continue the active_conduct of business a independently and with its separate employees except for certain transition services to be provided pursuant to the continuing arrangements neither business a conducted by the distributing sag through controlled nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the first controlled distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the first controlled distribution distributing and members of the distributing sag have been the principal owners of the goodwill and significant assets of business a held by the distributing sag and will continue to be the principal owners following the first controlled distribution the five years of financial information submitted for business b that will be conducted by the controlled sag through distributing represents business b’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the first controlled distribution the controlled sag will continue the active_conduct of business b independently and with its separate employees except for certain transition services to be provided pursuant to the continuing arrangements neither business b conducted by the distributing sag and to be conducted by the controlled sag nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the first controlled distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending plr-110956-13 on the date of the first controlled distribution the distributing sag has been the principal_owner of the goodwill and significant assets of business b and the controlled sag will be the principal_owner following the first controlled distribution the first controlled distribution will be carried out to facilitate the controlled distribution the first controlled distribution is motivated in whole or substantial part by this corporate business_purpose the first controlled distribution will not be used principally as a device for distributing the e_p of distributing or controlled or both for purposes of sec_355 immediately after the first controlled distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-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 first controlled distribution for purposes of sec_355 immediately after the first controlled distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-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 first controlled distribution or ii attributable to distributions on distributing 1’s stock_or_securities that were 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 first controlled distribution the first 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 other than persons described in sec_355 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 to any such corporation immediately after the first controlled distribution and after applying the attribution_rules of sec_318 pursuant to sec_355 no person will hold a 50-percent-or-greater interest within the meaning of sec_355 in plr-110956-13 either distributing or controlled who did not hold such an interest immediately before the first controlled distribution any indebtedness owed by controlled or its subsidiaries to distributing or its subsidiaries after the first controlled distribution will not constitute stock_or_securities except as provided in the proposed transactions no intercorporate debt will exist between distributing and its subsidiaries and controlled and its subsidiaries at the time of or subsequent to the first controlled distribution other than obligations arising in the ordinary course of business or from the continuing arrangements except as otherwise noted above with respect to the continuing arrangements payments made in connection with all continuing transactions following the proposed transactions between distributing and its subsidiaries and controlled and its subsidiaries will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length distributing and controlled each will pay its own expenses if any incurred in connection with the controlled contribution and the first controlled distribution neither distributing nor controlled accumulated its receivables or made extraordinary payment of its payables in anticipation of the first controlled distribution except pursuant to the elimination or reduction of intercompany balances in connection with the proposed transactions the total adjusted bases and the fair_market_value of the assets to be transferred to controlled by distributing in the controlled contribution will each equal or exceed the sum of the liabilities assumed by controlled as determined under sec_357 any liabilities assumed as determined under sec_357 by controlled in the controlled contribution will have been incurred in the ordinary course of business and will be associated with the assets transferred the total fair_market_value of the assets transferred to controlled by distributing in the controlled contribution will exceed the sum of i the amount of any liabilities assumed as determined under sec_357 by controlled in connection therewith ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection therewith 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 section plr-110956-13 a without the recognition of gain received by distributing in connection therewith the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately after the controlled contribution the total fair_market_value of the assets transferred to controlled in the controlled contribution will be equal to or exceed the aggregate adjusted_basis of those assets so transferred no party to the controlled contribution or the first controlled distribution will be an investment_company as defined in sec_368 and iv no part of the consideration to be distributed by distributing in the first controlled distribution will be received by distributing as a creditor or an employee or in any capacity other than that of a shareholder of distributing any money property or stock contributed by distributing to controlled in the controlled contribution will be transferred solely in exchange for stock and securities in controlled and cash distributing 1’s distribution of the controlled stock to distributing in the first controlled distribution will be solely with respect to distributing 2’s ownership of distributing stock neither distributing nor controlled has been or will be a usrphc at any time during the five-year period ending on the date of the first controlled distribution and neither distributing nor controlled will be a usrphc immediately after the first controlled distribution distributing will comply with any applicable notice and filing_requirements set forth in sec_897 and sec_1445 and the regulations thereunder the controlled contribution and the first controlled distribution will be undertaken pursuant to a plan_of_reorganization no party to the controlled contribution or the first controlled distribution is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 the controlled securities will constitute securities as that term is used in sec_361 the controlled contribution and the controlled distribution plr-110956-13 the following representations are made with respect to the controlled contribution and the controlled distribution the five years of financial information submitted for business a to be conducted by the distributing sag through controlled at the time of the controlled distribution represents business a’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the controlled distribution the distributing sag will continue the active_conduct of business a independently and with its separate employees except for certain transition services to be provided pursuant to the continuing arrangements neither business a to be conducted by the distributing sag through controlled nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the controlled distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the controlled distribution the distributing sag through controlled will have been the principal_owner of the goodwill and significant assets of business a and will continue to be the principal_owner following the controlled distribution the five years of financial information submitted for business b that will be conducted by the controlled sag through distributing represents business b’s present operations and there have been no substantial operational changes since the date of the last financial statements submitted following the controlled distribution the controlled sag will continue the active_conduct of business b independently and with its separate employees except for certain transition services to be provided pursuant to the continuing arrangements neither business b to be conducted by the controlled sag through distributing nor control of any entity conducting this business will have been acquired during the five-year period ending on the date of the controlled distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part throughout the five-year period ending on the date of the controlled distribution the distributing sag through distributing will have been the principal_owner of the goodwill and significant assets of business b and the controlled sag will continue to be the principal_owner following the controlled distribution plr-110956-13 the controlled distribution will be carried out for the corporate business purposes of i separating business b from the retained businesses ii alleviating the competition for capital and resource allocation between the needs of business b and the distributing group and iii providing business b with an attractive corporate currency to use for acquisition and employee compensation purposes the controlled distribution is motivated in whole or substantial part by these corporate business purposes the controlled distribution will not be used principally as a device for distributing the e_p of distributing or controlled or both for purposes of sec_355 immediately after the controlled distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of distributing stock entitled to vote or 50-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 controlled distribution for purposes of sec_355 immediately after the controlled distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing 50-percent or more of the total combined voting power of all classes of controlled stock entitled to vote or 50-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 controlled distribution or ii attributable to distributions on distributing 5’s stock_or_securities that were 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 controlled distribution 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 other than persons described in sec_355 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 to any such corporation immediately after the controlled distribution and after applying the attribution_rules of sec_318 pursuant to sec_355 no person will hold a percent-or-greater interest within the meaning of sec_355 in either distributing or controlled who did not hold such an interest immediately before the controlled distribution plr-110956-13 any indebtedness owed by controlled or its subsidiaries to distributing or its subsidiaries after the controlled distribution will not constitute stock_or_securities no intercorporate debt will exist between distributing and its subsidiaries and controlled and its subsidiaries at the time of or subsequent to the controlled distribution other than obligations arising in the ordinary course of business or from the continuing arrangements except as otherwise noted above with respect to the continuing arrangements payments made in connection with all continuing transactions following the proposed transaction between distributing and its subsidiaries and controlled and its subsidiaries will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length distributing and controlled each will pay its own expenses if any incurred in connection with the controlled contribution and the controlled distribution neither distributing nor controlled accumulated its receivables or made extraordinary payment of its payables in anticipation of the controlled distribution except pursuant to the elimination or reduction of intercompany balances in connection with the proposed transactions the total adjusted bases and the fair_market_value of the assets to be transferred to controlled by distributing in the controlled contribution will each equal or exceed the sum of the liabilities assumed by controlled as determined under sec_357 any liabilities assumed as determined under sec_357 by controlled in the controlled contribution will have been incurred in the ordinary course of business and will be associated with the assets transferred the total fair_market_value of the assets transferred to controlled by distributing 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 therewith ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection therewith 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 therewith the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately after the controlled contribution plr-110956-13 the payment of cash in lieu of fractional shares of controlled will be because country a prohibits the issuance of fractional shares and does not represent separately bargained-for consideration the method used for handling fractional share interests is intended to limit the amount of cash received by any one of the shareholders to less than the value of one full share of controlled stock the fractional share interests of each controlled shareholder will be aggregated and no controlled shareholder will receive cash in an amount equal to or greater than the value of one full share of controlled stock the total fair_market_value of the assets transferred to controlled in the controlled contribution will be equal to or exceed the aggregate adjusted_basis of those assets so transferred no party to the controlled contribution or the controlled distribution will be an investment_company as defined in sec_368 and iv no part of the consideration to be distributed by distributing in the controlled distribution will be received by any shareholder of distributing as a creditor or an employee or in any capacity other than that of a shareholder of distributing any money property or stock contributed by distributing to controlled in the controlled contribution will be exchanged solely for stock_or_securities in controlled distributing 5’s distribution of the controlled stock to its shareholders in the controlled will be solely with respect to their ownership of distributing stock neither distributing nor controlled has been or will be a usrphc at any time during the five-year period ending on the date of the controlled distribution and neither distributing nor controlled will be a usrphc immediately after the controlled distribution distributing will comply with any applicable notice and filing_requirements set forth in sec_897 and sec_1445 and the regulations thereunder as of date distributing does not have any foreign 5-percent shareholders the controlled contribution and the controlled distribution will be undertaken pursuant to a plan_of_reorganization no party to the controlled contribution or the controlled distribution is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 plr-110956-13 the total number of shares of retained stock that will be held by members of the remaining group will not exceed qq percent of the issued and outstanding shares of controlled distributing 5’s principal purpose for retaining the retained stock will be to satisfy its obligations under pre-existing compensation plans none of distributing 5’s directors or officers will serve as directors or officers of controlled as long as distributing retains the retained stock distributing will dispose_of the retained stock as soon as a disposition is warranted consistent with its business_purpose for retaining the retained stock but in any event not later than five years after the controlled distribution distributing will vote the retained stock in proportion to the votes cast by controlled 5’s other shareholders the controlled merger the following representations are made with respect to the controlled merger controlled and distributing will adopt a plan of merger and the controlled merger will occur pursuant to that plan the controlled merger will occur on a single date pursuant to which controlled will cease its separate legal existence for all purposes the controlled merger will be effected pursuant to the laws of state c and state a as a result of the controlled merger all of the assets and liabilities of controlled will become the assets and liabilities of distributing by operation of law the fair_market_value of the distributing stock received by sub and sub in the controlled merger will be approximately equal to the fair_market_value of the controlled stock surrendered in the exchange the fair_market_value of the controlled assets received by distributing in the controlled merger will be approximately equal to the fair_market_value of the controlled stock surrendered in the exchange prior to adoption of the plan of merger no assets of controlled will have been distributed in_kind transferred or sold to distributing except for i transactions occurring in the normal course of business and ii transactions occurring more than three years prior to adoption of the plan of merger plr-110956-13 all of the proprietary interests in controlled will be preserved within the meaning of sec_1_368-1 neither distributing nor any person related within the meaning of sec_1_368-1 to distributing has any plan or intention to redeem or otherwise acquire any shares of the distributing stock issued in the controlled merger either directly or through any transaction agreement or arrangement with any other person distributing has no plan or intention to sell or otherwise dispose_of any of the assets of controlled acquired in the controlled merger except for dispositions made in the ordinary course of business or transfers described in sec_368 or sec_1_368-2 the liabilities of controlled assumed as determined under sec_357 by distributing in the controlled merger and the liabilities to which the transferred assets are subject will have been incurred by controlled in the ordinary course of business and will be associated with the assets transferred following the controlled merger distributing will continue the historic_business of controlled or use a significant portion of controlled 1’s historic_business_assets in a business within the meaning of sec_1_368-1 distributing controlled sub and sub each will pay its own expenses if any incurred in connection with the controlled merger there is no intercorporate debt existing between distributing and controlled that was issued acquired or will be settled at a discount no two parties to the controlled merger are investment companies as defined in sec_368 and iv controlled is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 the total fair_market_value of the assets transferred to distributing by controlled will exceed the sum of i the amount of liabilities assumed as determined under sec_357 by distributing in connection with the controlled merger ii the amount of liabilities owed to distributing by controlled that are discharged or extinguished in connection with the controlled merger and iii the amount of any money and the fair_market_value of any other_property other than stock permitted to be received under sec_361 without the recognition of gain received by controlled in connection plr-110956-13 with the controlled merger the fair_market_value of the assets of distributing will exceed the amount of distributing 4’s liabilities immediately after the controlled merger neither distributing nor controlled has been or will be a usrphc at any time during the five-year period ending on the date of the controlled merger and neither distributing nor controlled will be a usrphc immediately after the controlled merger distributing will comply with any applicable notice and filing_requirements set forth in sec_897 and sec_1445 and the regulations thereunder distributing will own greater than percent of the single class of issued and outstanding shares in controlled on the date of adoption of the plan of merger and at all times until the controlled merger is completed and controlled has no and will have no outstanding warrants options convertible securities or other obligations that may be classified as equity for federal tax purposes no shares of controlled will have been redeemed during the three years preceding the adoption of the plan of merger immediately prior to the controlled merger controlled and distributing were classified as corporations for u s federal tax purposes other than the acquisition of sub and sub on date controlled did not acquire assets or shares in any nontaxable_transaction at any time except for acquisitions occurring more than three years before the date of adoption of the plan of merger no assets of controlled have been or will be disposed of by either controlled or distributing except for dispositions in the ordinary course of business and dispositions occurring more than three years prior to adoption of the plan of merger the controlled merger will not be preceded or followed by the reincorporation in or transfer or sale to a recipient corporation of the business or business_assets of controlled if persons holding directly or indirectly more than percent in value of the controlled shares also hold directly or indirectly more than percent in value of the shares in the recipient corporation for purposes of this representation ownership is determined by application of the constructive_ownership rules of sec_318 as modified by sec_304 plr-110956-13 controlled will report all earned_income represented by assets that will be transferred to distributing such as receivables being reported on a cash_basis unfinished construction contracts commissions due etc the fair_market_value of the assets of controlled will exceed its liabilities on the date of adoption of the plan of merger and at all times until the controlled merger is completed there is no intercorporate debt existing between distributing and controlled that has been or will be cancelled forgiven or settled at a discount except for transactions that occurred more than three years prior to the controlled merger all other transactions undertaken contemporaneously with in anticipation of in conjunction with or in any way related to the controlled merger have been fully disclosed at the time of the controlled merger there will be no intercompany_item within the meaning of sec_1_1502-13 with respect to the stock of controlled neither distributing nor controlled is or at the time of the controlled merger will be an organization that is exempt from u s federal_income_tax under sec_501 or any other provision of the code a regulated_investment_company within the meaning of sec_851 or a real_estate_investment_trust within the meaning of sec_856 the controlled merger will be carried out for the corporate business purposes of integrating the retained businesses and simplifying the remaining group’s corporate structure the controlled merger is motivated in whole or substantial part by this corporate business_purpose other representations the following representations are made with respect to other steps occurring as part of the proposed transactions the llc sale will qualify as a taxable_exchange under sec_1001 the newco formation will qualify as a tax-free sec_351 transfer to a controlled_corporation the second controlled distribution will qualify as a tax-free sec_355 distribution plr-110956-13 the sub liquidation will qualify as a tax-free sec_332 liquidation the sub merger will qualify as a tax-free sec_332 liquidation rulings the controlled contribution and the controlled distribution based solely on the information submitted and the representations set forth above and provided that i distributing 1’s distribution of controlled stock to distributing in the controlled distribution is solely with respect to distributing 2’s ownership of distributing stock ii any money property or stock contributed by distributing to controlled in the controlled contribution is exchanged solely for stock_or_securities in controlled and iii any other transfer of stock money or property between distributing controlled or any distributing shareholder and any person related to distributing controlled or any distributing shareholder is respected as a separate transaction we rule as follows with respect to the controlled contribution and the controlled distribution the controlled contribution and the controlled distribution taken together will qualify as a reorganization within the meaning of sec_368 each of distributing and controlled will be a_party_to_a_reorganization within the meaning of sec_368 distributing will not recognize any gain_or_loss upon its transfer of assets to controlled in the controlled contribution sec_361 and sec_357 controlled will not recognize any gain_or_loss upon its receipt of assets from distributing in the controlled contribution sec_1032 controlled 1’s basis in each asset received from distributing in the controlled contribution will equal the basis of that asset in distributing 1’s hands immediately before the transfer sec_362 controlled 1’s holding_period in each asset received from distributing in the controlled contribution will include the period during which distributing held that asset sec_1223 distributing will not recognize any gain_or_loss upon its distribution of controlled stock to distributing in the controlled distribution sec_361 plr-110956-13 distributing will not recognize any gain_or_loss and will not otherwise include any amount in income upon its receipt of controlled stock in the controlled distribution sec_355 distributing 2’s basis in its distributing stock and controlled stock immediately after the controlled distribution will equal distributing 2’s basis in its distributing stock held immediately before the controlled distribution allocated between the stock of distributing and controlled in proportion to their fair market values at the time of the controlled distribution in accordance with sec_1_358-2 sec_358 b and c distributing 2’s holding_period in the controlled stock it received in the controlled distribution will include the holding_period of the distributing stock with respect to which the controlled distribution is made provided that the distributing stock is held as a capital_asset on the date of the controlled distribution sec_1223 distributing 1’s earnings_and_profits if any will be allocated between distributing and controlled in accordance with sec_312 and sec_1 a the distributing contribution and the distributing split-down based solely on the information submitted and the representations set forth above and provided that i distributing 2’s distribution of controlled stock to the holders of class b shares in the distributing split-down is solely with respect to their ownership of the class b shares ii any money property or stock contributed by distributing to controlled in the distributing contribution is exchanged solely for stock_or_securities in controlled and iii any other transfer of stock money or property between distributing controlled or any distributing shareholder and any person related to distributing controlled or any distributing shareholder is respected as a separate transaction we rule as follows with respect to the distributing contribution and the distributing split-down the distributing contribution and the distributing split-down taken together will qualify as a reorganization within the meaning of sec_368 each of distributing and controlled will be a_party_to_a_reorganization within the meaning of sec_368 distributing will not recognize any gain_or_loss upon its transfer of assets to controlled in the distributing contribution sec_361 and sec_357 controlled will not recognize any gain_or_loss upon its receipt of assets from distributing in the distributing contribution sec_1032 plr-110956-13 controlled 1’s basis in each asset received from distributing in the distributing contribution will equal the basis of that asset in distributing 2’s hands immediately before the transfer sec_362 controlled 1’s holding_period in each asset received from distributing in the distributing contribution will include the period during which distributing held that asset sec_1223 distributing will not recognize any gain_or_loss upon its transfer of controlled stock to the holders of class b shares in the distributing split-down sec_361 the holders of class b shares will not recognize any gain_or_loss and will not otherwise include any amount in income upon their receipt of controlled stock in exchange for their class b shares in the distributing split-down sec_355 the basis of each holder of class b shares in the shares of controlled stock received in the distributing split-down will equal its adjusted_basis in the class b shares surrendered in the exchange allocated among the controlled shares received in the manner described in sec_1_358-2 sec_358 and b the holding_period of each holder of class b shares in the controlled stock received in the distributing split-down will include such shareholder’s holding_period in the class b shares with respect to which the distributing split-down is made provided that the class b shares are held as a capital_asset on the date of the distributing split-down sec_1223 distributing 2’s earnings_and_profits if any will be allocated between distributing and controlled in accordance with sec_312 and sec_1_312-10 the country d restructuring based solely on the information submitted and the representations set forth above and provided that i distributing 3’s distribution of controlled stock to distributing in the distribution is with respect to its ownership of distributing stock ii any money property or stock contributed by distributing to controlled in the contribution is exchanged solely for stock_or_securities in controlled and iii any other transfer of stock money or property between distributing controlled or any distributing shareholder and any person related to distributing controlled or any distributing shareholder is respected as a separate transaction we rule as follows on the country d restructuring plr-110956-13 for u s federal_income_tax purposes the transactions that comprise the country d restructuring will be treated as if a distributing had formed controlled and had transferred of all its assets relating to business a cash cash equivalents and investment_assets to controlled in exchange for all of the outstanding_stock of controlled and controlled 2’s assumption of debt and then b distributing distributed the controlled distribution all of the outstanding_stock in controlled to distributing see revrul_77_191 1977_1_cb_94 revrul_57_311 1957_2_cb_243 the country d restructuring will be a reorganization within the meaning of sec_368 distributing and controlled each will be a_party_to_a_reorganization within the meaning of sec_368 distributing will not recognize any gain_or_loss upon its transfer of assets to controlled in the controlled contribution sec_361 and sec_357 controlled will not recognize any gain_or_loss upon its receipt of assets from distributing in the controlled contribution sec_1032 controlled 2’s basis in each asset received from distributing in the controlled contribution will equal the basis of that asset in distributing 3’s hands immediately before the transfer sec_362 controlled 2’s holding_period in each asset received from distributing in the controlled contribution will include the period during which distributing held that asset sec_1223 distributing will not recognize any gain_or_loss upon its distribution of controlled stock to distributing in the controlled distribution sec_361 distributing will not recognize any gain_or_loss and will not otherwise include any amount in income upon its receipt of controlled stock in the controlled distribution sec_355 distributing 4’s basis in its distributing stock and controlled stock immediately after the controlled distribution will equal distributing 4’s basis in its distributing stock held immediately before the controlled distribution allocated between the stock of distributing and controlled in proportion to their fair market values at the time of the controlled distribution in accordance with sec_1_358-2 sec_358 b and c distributing 4’s holding_period in the controlled stock it received in the controlled distribution will include the holding_period of the distributing stock plr-110956-13 with respect to which the controlled distribution is made provided that the distributing stock is held as a capital_asset on the date of the controlled distribution sec_1223 distributing 3’s earnings_and_profits if any will be allocated between distributing and controlled in accordance with sec_312 and sec_1 a the controlled contribution and the controlled distribution based solely on the information submitted and the representations set forth above and provided that i distributing 4’s distribution of controlled stock to distributing in the distribution is with respect to its ownership of distributing stock ii any money property or stock contributed by distributing to controlled in the contribution is exchanged solely for stock_or_securities in controlled and cash and iii any other transfer of stock money or property between distributing controlled or any distributing shareholder and any person related to distributing controlled or any distributing shareholder is respected as a separate transaction we rule as follows on the controlled contribution and the controlled distribution the controlled contribution and the controlled distribution taken together will qualify as a reorganization within the meaning of sec_368 each of distributing and controlled will be a_party_to_a_reorganization within the meaning of sec_368 distributing will not recognize any gain_or_loss upon its transfer of assets to controlled in the controlled contribution sec_361 and sec_357 controlled will not recognize any gain_or_loss upon its receipt of assets from distributing in the controlled contribution sec_1032 controlled 3’s basis in each asset received from distributing in the controlled contribution will equal the basis of that asset in distributing 4’s hands immediately before the transfer sec_362 controlled 3’s holding_period in each asset received from distributing in the controlled contribution will include the period during which distributing held that asset sec_1223 distributing will not recognize any gain_or_loss upon its distribution of controlled stock to distributing in the controlled distribution sec_361 plr-110956-13 distributing will not recognize any gain_or_loss and will not otherwise include any amount in income upon its receipt of controlled stock in the controlled distribution sec_355 distributing 1’s basis in its distributing stock and controlled stock immediately after the controlled distribution will equal distributing 1’s basis in its distributing stock held immediately before the controlled distribution allocated between the stock of distributing and controlled in proportion to their fair market values at the time of the controlled distribution in accordance with sec_1_358-2 sec_358 b and c distributing 1’s holding_period in the controlled stock it received in the controlled distribution will include the holding_period of the distributing stock with respect to which the controlled distribution is made provided that the distributing stock is held as a capital_asset on the date of the controlled distribution sec_1223 distributing 4’s earnings_and_profits if any will be allocated between distributing and controlled in accordance with sec_312 and sec_1 a and sec_1_1502-33 the controlled contribution and the first controlled distribution based solely on the information submitted and the representations set forth above and provided that i distributing 1’s distribution of controlled stock to distributing in the distribution is with respect to its ownership of distributing stock ii any money property or stock contributed by distributing to controlled in the contribution is exchanged solely for stock_or_securities in controlled and cash and iii any other transfer of stock money or property between distributing controlled or any distributing shareholder and any person related to distributing controlled or any distributing shareholder is respected as a separate transaction we rule as follows on the controlled contribution and the controlled distribution the controlled contribution and the first controlled distribution taken together will qualify as a reorganization within the meaning of sec_368 each of distributing and controlled will be a_party_to_a_reorganization within the meaning of sec_368 distributing will not recognize any gain_or_loss upon its transfer of assets to controlled in the controlled contribution sec_361 and sec_357 controlled will not recognize any gain_or_loss upon its receipt of assets from distributing in the controlled contribution sec_1032 plr-110956-13 controlled 4’s basis in each asset received from distributing in the controlled contribution will equal the basis of that asset in distributing 1’s hands immediately before the transfer sec_362 controlled 4’s holding_period in each asset received from distributing in the controlled contribution will include the period during which distributing held that asset sec_1223 distributing will not recognize any gain_or_loss upon its distribution of controlled stock cash and controlled securities to distributing in the first controlled distribution or upon its transfer of controlled securities to llc in repayment of indebtedness sec_361 distributing will not recognize any gain_or_loss and will not otherwise include any amount in income upon its receipt of shares of controlled stock in the first controlled distribution sec_355 distributing will be treated as having received in the first controlled distribution as a distribution_of_property to which sec_301 applies an amount equal to the sum of the cash distributed to it in the first controlled distribution and the fair_market_value of the controlled securities sec_355 sec_356 and sec_356 distributing 2’s basis in its distributing stock and controlled stock immediately after the first controlled distribution will equal distributing 2’s basis in its distributing stock held immediately before the first controlled distribution as adjusted under sec_1_358-1 in connection with the distribution in the first controlled distribution of the controlled securities and cash allocated between the stock of distributing and controlled in proportion to their fair market values at the time of the first controlled distribution in accordance with sec_1_358-2 sec_358 b and c distributing 2’s basis in the controlled securities immediately after the first controlled distribution will equal the fair_market_value of the controlled securities sec_301 sec_1_358-1 distributing 2’s holding_period in the controlled stock it received in the first controlled distribution will include the holding_period of the distributing stock with respect to which the first controlled distribution is made provided that the distributing stock is held as a capital_asset on the date of the first controlled distribution sec_1223 distributing 1’s earnings_and_profits if any will be allocated between distributing and controlled in accordance with sec_312 and sec_1 a plr-110956-13 the controlled contribution and the controlled distribution based solely on the information submitted and the representations set forth above and provided that i the distribution of controlled stock to distributing 5’s shareholders in the distribution is with respect to their ownership of distributing stock ii any money property or stock contributed by distributing to controlled in the contribution is exchanged solely for stock_or_securities in controlled and iii any other transfer of stock money or property between distributing controlled or any distributing shareholder and any person related to distributing controlled or any distributing shareholder is respected as a separate transaction we rule as follows on the controlled contribution and the controlled distribution for u s federal_income_tax purposes the transactions that comprise the controlled contribution and the controlled distribution will be treated as if a distributing had transferred all the shares of controlled and newco and the controlled securities received from distributing to controlled in exchange for controlled stock and then b distributing distributed all the controlled stock except the retained stock to its shareholders the controlled contribution and the controlled distribution taken together will qualify as a reorganization within the meaning of sec_368 each of distributing and controlled will be a_party_to_a_reorganization within the meaning of sec_368 distributing will not recognize any gain_or_loss upon its transfer of assets to controlled in the controlled contribution sec_361 and sec_357 controlled will not recognize any gain_or_loss upon its receipt of assets from distributing in the controlled contribution sec_1032 controlled 5’s basis in each asset received from distributing in the controlled contribution will equal the basis of that asset in distributing 5’s hands immediately before the transfer sec_362 controlled 5’s holding_period in each asset received from distributing in the controlled contribution will include the period during which distributing held that asset sec_1223 distributing will not recognize any gain_or_loss upon its distribution of controlled stock in the controlled distribution sec_361 plr-110956-13 the shareholders of distributing will not recognize any gain_or_loss and will not otherwise include any amount in income on their receipt of controlled stock in the controlled distribution sec_355 each distributing shareholder’s basis in the distributing stock and controlled stock immediately after the controlled distribution will equal the basis of the distributing stock that the shareholder held immediately before the controlled distribution allocated between the stock of distributing and controlled in proportion to their fair market values at the time of the controlled distribution in accordance with sec_1_358-2 sec_358 b and c each distributing shareholder’s holding_period in the controlled stock received in the controlled distribution will include the holding_period of the distributing stock with respect to which the controlled distribution is made provided that the shareholder holds such distributing stock as a capital_asset on the date of the controlled distribution sec_1223 distributing 5’s earnings_and_profits if any will be allocated between distributing and controlled in accordance with sec_312 and sec_1 a payments between distributing and controlled or any of their respective affiliates under any of the continuing arrangements regarding liabilities indemnities or other obligations that a have arisen or will arise for a taxable_period ending on or before the controlled distribution and b will not become fixed and ascertainable until after the controlled distribution will be viewed as occurring before the controlled distribution 344_us_6 revrul_83_73 1983_1_cb_84 the controlled merger based solely on the information submitted and the representations set forth above and provided that i controlled 1’s transfer of its assets to distributing in the controlled merger is with respect to distributing 4’s ownership of controlled 1’s stock ii the shares of controlled stock cancelled and the liabilities of controlled that are assumed by distributing in the controlled merger are cancelled and assumed solely in exchange for controlled 1’s transfer of its assets to distributing and iii any other transfer of stock money or property between distributing controlled or any controlled shareholder and any person related to distributing controlled or any controlled shareholder is respected as a separate transaction we rule as follows on the controlled merger the controlled merger will be treated as a distribution in complete_liquidation of controlled under sec_332 with respect to distributing and will qualify plr-110956-13 as a reorganization within the meaning of sec_368 with respect to sub and sub and distributing and controlled will each be a party to the reorganization within the meaning of sec_368 neither sub nor sub will recognize any gain_or_loss on the receipt of distributing stock solely in exchange for controlled stock in the controlled merger sec_354 distributing will not recognize any gain_or_loss on its receipt of the assets of controlled in the controlled merger sec_332 controlled will not recognize any gain_or_loss on the distribution of its assets to and the assumption of its liabilities by distributing in the controlled merger sec_337 distributing 4’s basis in each asset received from controlled in the controlled merger will equal the basis of that asset in controlled 1’s hands immediately before the controlled merger sec_334 distributing 4’s holding_period in each asset received from controlled in the controlled merger will include the period during which controlled held that asset sec_1223 distributing will succeed to and take into account the items of controlled described in sec_381 subject_to the conditions and limitations specified in sec_381 sec_382 sec_383 sec_384 and sec_1502 and the regulations thereunder sec_381 and sec_1_381_a_-1 caveats except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter in particular this office has not reviewed any information pertaining to and has made no determination regarding the following i whether any distribution occurring as part of the proposed transactions satisfies the business_purpose requirement of sec_1_355-2 ii whether any distribution occurring as part of the proposed transactions is being used principally as a device for the distribution of the earnings_and_profits of the applicable distributing_corporation controlled_corporation or both see sec_355 and sec_1_355-2 plr-110956-13 iii whether any distribution occurring as part of the proposed transactions is part of a plan or series of related transactions under sec_355 and sec_1_355-7 iv the federal_income_tax treatment of step ii step iv step v step xxiii and step xxvi of the proposed transactions or of any other step not addressed in the rulings portion of this letter v the federal_income_tax treatment of the elimination of intercompany debts through repayment distribution assumption or set-off except as otherwise expressly provided vi whether sec_108 applies to the controlled contribution vii whether any debt of an entity that is an intercompany obligation within the meaning of sec_1_1502-13 or that might become an intercompany obligation as a result of any step or steps the proposed transactions is subject_to the deemed satisfaction rules of sec_1_1502-13 or the consequences to any party of any deemed satisfaction and or reissuance under those rules viii whether the controlled securities will constitute securities for purposes of sec_361 ix to the extent not otherwise specifically ruled upon above any consequences under sec_367 with respect to any transaction described in this letter_ruling x the potential application of sec_482 to any payments made in connection with continuing transactions between distributing and its subsidiaries and controlled and its subsidiaries that are not made for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length and xi the federal tax classification under sec_301 et seq of any of the entities involved in the proposed transactions or the validity of any entity classification election made with respect to any of the entities procedural statements 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 a copy of this letter must be attached to any income return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by plr-110956-13 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 maury passman_________ maury passman senior technician reviewer branch office of associate chief_counsel corporate cc