internal_revenue_service date number info release date uilc cc p si 1-cor-117611-00 we are responding to correspondence submitted via fax by enrolled_agent requesting relief in order to establish as the effective year for your s_corporation_election the information submitted explains that the attorney assisting the taxpayer at inception had fallen ill and failed to file the s_corporation_election nevertheless because the taxpayer’s return for the taxable_year was received late it is ineligible for automatic late s_corporation relief although we are unable to respond to your request as submitted this letter provides useful information relating to your situation announcement copy enclosed provides guidance on seeking relief for late s_corporation elections and inadvertent invalid s_corporation elections generally to request relief for a late or invalid s_corporation_election you must request a private_letter_ruling from the national_office the procedures for requesting a private_letter_ruling are set out in revproc_2000_1 copy enclosed in addition revproc_2000_1 requires taxpayers to submit a user_fee along with their ruling_request the standard user_fee for a private_letter_ruling is dollar_figure however taxpayers with gross_income of less than dollar_figure million on their last-filed tax_return qualify for a reduced user_fee in the amount of dollar_figure if you are eligible to pay the reduced fee a statement certifying your gross_income must accompany your request otherwise you will be billed for the higher fee please review appendix b for a sample format for requesting a private_letter_ruling if you decide to submit a formal request for a private_letter_ruling please provide documents supporting your intention to be an s_corporation from inception include the proper user_fee and refer your request to our office by adding the following to the address attn cc p a p o box ben franklin station washington dc direct to cc psi b1 room please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful sincerely yours s dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs and special industries enclosures announcement revproc_2000_1


t c memo united_states tax_court farshid ghafouri and elahe h ghafouri petitioners v commissioner of internal revenue respondent docket no filed date farshid ghafouri and elahe h ghafouri pro sese thomas r mackinson and daniel j bryant for respondent memorandum findings_of_fact and opinion haines judge respondent determined a dollar_figure deficiency in petitioners’ federal_income_tax and an dollar_figure accuracy-related_penalty under sec_6662 for the issues remaining for our decision are whether all section references are to the internal_revenue_code in effect for the continued petitioners are entitled to a net_operating_loss nol carryforward deduction and whether petitioners are liable for the accuracy-related_penalty findings_of_fact the stipulations of facts together with the attached exhibits are incorporated herein by this reference petitioners resided in california at the time they timely filed their petition petitioners timely filed their income_tax return and respondent issued a notice_of_deficiency on date respondent determined that petitioners failed to include the following in income compensation of dollar_figure cancellation_of_indebtedness_income of dollar_figure ordinary dividend income of dollar_figure and pension distributions of dollar_figure petitioners have admitted or conceded that all of these items should have been included in income in the notice_of_deficiency respondent also disallowed an nol carryforward deduction of dollar_figure and imposed a sec_6662 accuracy-related_penalty of dollar_figure these are the only two issues remaining for our decision continued year at issue and all rule references are to the tax_court rules_of_practice and procedure unless otherwise indicated the remaining adjustments in the notice_of_deficiency are computational on date petitioners’ daughter dr nazli ghafouri dr ghafouri purchased the property pincite jasmine court in carlsbad california jasmine court property for dollar_figure with a dollar_figure mortgage dr ghafouri was the sole mortgagor and was the only owner listed on the title on date dr ghafouri purchased the property pincite shasta place in carlsbad california shasta place property for dollar_figure with a dollar_figure mortgage dr ghafouri was the sole mortgagor and was the only owner listed on the title the shasta place property and the jasmine court property were both intended to be rental properties the jasmine court property however was never rented out dr ghafouri sold the jasmine court property for dollar_figure on date notices of default for the shasta place property were recorded against dr ghafouri on february and date she sold the shasta place property for dollar_figure on date dr ghafouri filed for bankruptcy as a result of the sales petitioners contend that they were the true owners of the properties and that they just borrowed dr ghafouri’s credit to purchase them because their own credit was poor petitioners have provided no evidence outside of their testimony that they provided the funds used to make the downpayments or that they were obligated to pay the mortgages insurance premiums or property taxes nor is there any evidence to support their contention that they were responsible for the repair and maintenance of both properties or for all of the decisions related to renting out the properties further there is no evidence as to whether petitioners were able to obtain legal_title to the properties petitioners began reporting losses from the rental of the shasta place property on their return such losses were also reported on petitioners’ and returns in petitioners filed amended returns for the and tax years that also reported losses related to the rental of the shasta place property petitioners began reporting nol carryforwards on their return and reported nol carryforwards on their and returns petitioners’ returns did not include information as to how the amounts of the nol carryforwards were calculated further petitioners’ former attorney admitted at trial that the amounts reported as nol carryforwards on the and returns were incorrect but asserted that the correct amount was reported for the nol at issue appears to stem from the losses dr ghafouri incurred when the properties were sold for less than their purchase prices opinion i nol carryforward deduction respondent disallowed the entire dollar_figure nol carryforward deduction that petitioners claimed on their return deductions are a matter of legislative grace and the taxpayer must prove that he is entitled to the deductions claimed rule a 292_us_435 taxpayers bear the burden of substantiating the amount of any claimed deduction by maintaining the records needed to establish entitlement see sec_6001 65_tc_87 aff’d per curiam 540_f2d_821 5th cir generally an nol is the excess of allowable deductions over gross_income for a given tax_year sec_172 only certain deductions are considered when calculating the amount of an individual’s nol sec_172 and d unless an exception applies an nol must first be carried back years and then carried forward years sec_172 if a taxpayer claims an nol deduction he must file with his return a concise statement setting forth the amount of the net_operating_loss_deduction claimed and all material and pertinent facts relative petitioners do not argue that the burden_of_proof shifts to respondent pursuant to sec_7491 nor have they shown that the threshold requirements of sec_7491 have been met thereto including a detailed schedule showing the computation of the net_operating_loss_deduction sec_1_172-1 income_tax regs moreover only the taxpayer who sustained the loss is entitled to an nol deduction see 292_us_435 there are two distinct reasons each alone sufficient to disallow the nol carryforward deduction petitioners claimed on their return first assuming that a loss was sustained that may be treated as an nol petitioners did not incur that loss second petitioners have failed to provide sufficient information to substantiate the claimed deduction a whether petitioners incurred a loss the nature of property rights is determined by state law and the appropriate tax treatment of those rights is determined by federal_law 472_us_713 blanche v commissioner tcmemo_2001_63 aff’d 33_fedappx_704 5th cir under california law the owner of the legal_title to property is presumed to be the owner of the full beneficial title cal evid code sec_662 west this presumption may be rebutted only by clear_and_convincing proof id dr ghafouri alone held legal_title to the shasta place property and the jasmine court property and is presumed to be the properties’ full beneficial or equitable owner the presumption that the legal owner is also the equitable owner may be overcome pursuant to california law by showing an agreement or understanding exists that shows an intent contrary to that which is reflected in the deed in re marriage of fossum cal rptr 3d ct app further a taxpayer becomes the equitable owner of property when he or she assumes the benefits and burdens of property ownership see 68_tc_115 puentes v commissioner tcmemo_2013_277 blanche v commissioner tcmemo_2001_63 the following factors are frequently considered when determining whether a taxpayer has assumed the benefits and burdens of property ownership whether the taxpayer had the right to possess the property and to enjoy the use rents and profits thereof whether the taxpayer had the duty to maintain the property whether the taxpayer was responsible for insuring the property whether the taxpayer bore the risk of loss of the property whether the taxpayer was obligated to pay taxes assessments and charges against the property whether the taxpayer had the right to improve the property and whether the taxpayer had the right to obtain legal_title at any time by paying the balance of the purchase_price puentes v commissioner tcmemo_2013_277 at see also 115_tc_605 on the basis of the evidence presented to the court and testimony presented at trial the claimed nol carryforward deduction stems from the sales of the shasta place property and the jasmine court property dr ghafouri purchased both properties she was the only person listed on the titles and was the sole mortgagor each property was sold in a short_sale and dr ghafouri filed bankruptcy as a result of the impact that these sales had on her credit petitioners however claim that they owned the properties and have attempted to deduct the losses_incurred as a result of the short_sales petitioners and dr ghafouri contend that the properties belonged to petitioners and that the petitioners simply borrowed dr ghafouri’s credit in order to purchase them petitioners have testified that dr ghafouri made no mortgage property_tax or insurance payments and that they were responsible for the rental and upkeep of the properties despite petitioners’ claimed ownership of the properties dr ghafouri bore the risk of ownership and reaped none of the rewards both properties were titled solely in dr ghafouri’s name and she was the sole mortgagor she alone was ultimately responsible for the mortgages and suffered the consequences when the properties were sold in short_sales the alleged arrangement between petitioners and dr ghafouri is not sufficient to elevate petitioners to equitable owners of the properties consequently assuming arguendo that an nol arose it was not incurred by petitioners b lack of substantiation how petitioners calculated the nol carryforward deduction claimed on the return is unclear neither a concise statement including the material and relevant facts nor a detailed schedule showing a computation of the nol amount was filed with the return or the returns for earlier years for which an nol carryforward deduction was claimed see sec_1_172-1 income_tax regs the only evidence submitted to support petitioners’ claimed nol carryforward deduction is their previous returns the prior tax returns show only that petitioners claimed nol carryforward deductions they do not provide evidence that petitioners are entitled to them see whitaker v commissioner tcmemo_2010_209 on the basis of the information petitioners provided we are unable to determine whether an allowable nol even arose consequently petitioners have failed to meet their burden_of_proof see id respondent correctly disallowed the nol carryforward deduction that petitioners claimed on their return we hold that petitioners are not entitled to an nol carryforward deduction for ii accuracy-related_penalty an accuracy-related_penalty of is imposed on the portion of an underpayment attributable to negligence or a substantial_understatement_of_income_tax sec_6662 and b and negligence includes the failure to properly substantiate items claimed on the return sec_1_6662-3 income_tax regs an understatement of income_tax is substantial if it exceeds the greater of of the tax required to be shown on the return or dollar_figure sec_6662 respondent bears the burden of production with respect to petitioners’ liability for the sec_6662 penalty and must produce evidence to prove that imposition of the penalty is appropriate see sec_7491 see also 116_tc_438 petitioners have admitted or conceded that they failed to report dollar_figure in income and respondent has shown that petitioners are not entitled to the nol carryforward deduction respondent has met his burden of production with respect to negligence and a substantial_understatement_of_income_tax petitioners requested a refund of dollar_figure on their return they failed to report dollar_figure in income and incorrectly claimed a dollar_figure deduction their understatement was certainly substantial within the meaning of sec_6662 the accuracy-related_penalty however is not imposed in situations where the taxpayer can establish that he acted with reasonable_cause and in good_faith sec_6664 the taxpayer has the burden of proving reasonable_cause see higbee v commissioner t c pincite petitioners have failed to argue or offer evidence that the penalty should not be imposed consequently we hold petitioners are liable for the sec_6662 penalty for the tax_year we have considered the parties’ remaining arguments and to the extent not discussed above conclude those arguments are irrelevant moot or without merit to reflect the foregoing decision will be entered for respondent


internal_revenue_service number release date index number ------------------------------------------- -------------------------------- -------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------- id no ------------------ telephone number ---------------------- refer reply to cc psi plr-136785-15 date date legend ------------------------------- decedent ------------------------------------------------------ ------------------- spouse --------------------------- --------------------------- date date -------------------- ------------------------ dear -------------- this letter responds to your personal representative’s letter of date and subsequent correspondence requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election under sec_2010 of the internal_revenue_code code portability election to allow a decedent’s surviving_spouse to take into account that decedent’s deceased spousal unused exclusion dsue amount the facts and representations submitted are as follows decedent died on date survived by spouse date is a date after the effective date of the amendment to sec_2010 which provides for portability of a dsue amount to a surviving_spouse to obtain the benefit of portability of decedent’s dsue amount to spouse decedent’s estate was required to file form_706 united_states estate and generation-skipping_transfer_tax return on or before the date that is nine months after decedent’s date of death or the last day of the period covered by an extension plr-136785-15 decedent’s form_706 was due on date the estate discovered its failure to elect portability after the due_date for making the election decedent’s estate represents that the value of decedent’s gross_estate is less than the basic exclusion amount in the year of the decedent’s death and that during her lifetime decedent made no taxable_gifts decedent’s estate requests an extension of time pursuant to sec_301_9100-3 to elect portability of decedent’s dsue amount pursuant to sec_2010 law and analysis sec_2001 imposes a tax on the transfer of the taxable_estate of every decedent who is a citizen or resident_of_the_united_states sec_2010 provides that a credit of the applicable credit_amount shall be allowed to the estate of every decedent against the tax imposed by sec_2001 sec_2010 provides that the applicable credit_amount is the amount of the tentative_tax that would be determined under sec_2001 if the amount with respect to which such tentative_tax is to be computed were equal to the applicable_exclusion_amount on date congress amended sec_2010 effective for estates of decedents dying and gifts made after date to allow portability of a decedent’s unused applicable_exclusion_amount between spouses tax relief unemployment insurance reauthorization and job creation act of pub_l_no sec_303 124_stat_3296 sec_2010 provides that the applicable_exclusion_amount is the sum of the basic exclusion amount and in the case of a surviving_spouse the dsue amount sec_2010 generally provides that the basic exclusion amount is dollar_figure to be adjusted for inflation annually after calendar_year sec_2010 defines the dsue amount to mean the lesser_of a the basic exclusion amount or b the excess of -- i the applicable_exclusion_amount of the last deceased spouse of the surviving_spouse over ii the amount with respect to which the tentative_tax is determined under sec_2001 on the estate of such deceased spouse sec_2010 provides that a dsue amount may not be taken into account by a surviving_spouse under sec_2010 unless the executor of the estate of the deceased spouse files an estate_tax_return on which such amount is computed and makes an election on such return that such amount may be so taken into account the election plr-136785-15 once made shall be irrevocable no election may be made if such return is filed after the time prescribed by law including extensions for filing such return sec_2010 provides that the secretary shall prescribe regulations as may be necessary or appropriate to implement sec_2010 sec_20_2010-2t a of the estate_tax regulations as in effect on date provides that to allow a decedent’s surviving_spouse to take into account that decedent’s dsue amount the executor of the decedent’s estate must elect portability of the dsue amount on a timely filed form_706 under sec_20_2010-2t a the due_date of an estate_tax_return required to elect portability is nine months after the decedent’s date of death or the last day of the period covered by an extension if an extension of time for filing has been granted under sec_20_2010-2t a the portability election is made by timely filing a complete and properly prepared estate_tax_return unless the executor satisfies the requirements for the election not to apply in sec_20_2010-2t a i sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 provides that the term statutory election means an election whose due_date is prescribed by statute the term regulatory election means an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute a request for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election the due_date for the portability election is prescribed by statute in the case of an estate required to file an estate_tax_return under sec_6018 see sec_2010 sec_6075 plr-136785-15 and a in the case of an estate that is not required to file an estate_tax_return under sec_6018 the due_date is prescribed by regulation see sec_20_2010-2t a see also sec_20_2010-2 and revproc_2014_18 2014_7_irb_513 sec_2 accordingly in the latter case a taxpayer may seek an extension of time to elect portability under the provisions of sec_301_9100-3 sec_6018 requires the filing of an estate_tax_return in all cases where the gross_estate exceeds the basic exclusion amount in effect under sec_2010 for the calendar_year which includes the date of death for purposes of this determination under sec_6018 the basic exclusion amount is reduced but not below zero by the sum of -- a the amount of the adjusted_taxable_gifts within the meaning of sec_2001 made by the decedent after date plus b the aggregate amount allowed as a specific exemption under sec_2521 as in effect before its repeal by the tax reform act of with respect to gifts made by the decedent after date decedent’s estate represents that based on the value of the gross_estate and taking into account any taxable_gifts decedent’s estate is not required to file an estate_tax_return under sec_6018 under these facts the commissioner has discretionary authority under sec_301_9100-3 to grant to decedent’s estate an extension of time to elect portability based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly we grant an extension of time of days from the date of this letter in which to elect portability under sec_2010 the election should be made by filing a complete and properly prepared form_706 and a copy of this letter within days from the date of this letter to the cincinnati service_center at the following address internal_revenue_service cincinnati service_center stop cincinnati oh for purposes of electing portability a form_706 filed by decedent’s estate within days from the date of this letter will be considered to be timely filed the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination if it is later determined that based on the value of the gross_estate and taking into account any taxable_gifts decedent’s estate is required to file an estate_tax_return pursuant to sec_6018 the commissioner is without authority under sec_301_9100-3 to grant to decedent’s estate an extension of time to elect portability and the grant of the extension referred to in this letter is deemed null and void plr-136785-15 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely associate chief_counsel passthroughs special industries by karlene m lesho karlene m lesho senior technician reviewer branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


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 tege eoeg teb presp-148276-06 date date dear -------------- this letter is in response to your application_for an allocation of authority to issue dollar_figure------- ------------------in clean renewable energy bonds crebs under sec_54 of the internal_revenue_code the code sec_54 of the code imposes a limitation of dollar_figure on the amount of crebs which may be issued to finance qualified projects the limitation sec_54 provides that the limitation is to be allocated by the secretary of treasury in such manner as the secretary deems appropriate except that no more than dollar_figure of the limitation may be allocated to finance qualified projects of qualified borrowers which are governmental bodies section of notice_2005_98 2005_52_irb_1211 provides that the limitation will be allocated among qualified projects for which a share of such limitation has been requested beginning with the project s requesting the smallest share in dollar amount and continuing with the project s requesting the next-smallest share until the total limitation has been exhausted however in the event that dollar_figure has been allocated to qualified projects of qualified borrowers that are governmental bodies the remaining shares of the limitation will be allocated under the methodology described in the previous sentence only to qualified projects of qualified borrowers that are not governmental bodies for purposes of allocating the limitation among projects all qualified projects located at the same site and owned by the same qualified_borrower are treated as a single project and each project is treated as requesting a single allocation presp-148276-06 an allocation of shares of the limitation cannot be made with respect to the projects owned by the borrower listed in appendix a because such borrower is a governmental body and dollar_figure has already been allocated to applications requesting a smaller share of the limitation to finance qualified projects owned by qualified borrowers that are governmental bodies we appreciate your submission of the application_for our consideration and encourage you to continue to pursue your plans for constructing a clean renewable energy project sincerely assistant chief_counsel exempt_organizations employment_tax government entities tax exempt government entities by timothy l jones senior counsel tax-exempt_bonds branch presp-148276-06 borrower name appendix a project type project location --------------------------------- --------------------------------- --------------------- --------------------------------- --------------------------------- --------------------- total hydropower facility hydropower facility -------------------------------- ---- -------------------------------- ---- amount requested dollar_figure-------------- dollar_figure--------------- dollar_figure---------------- ---------------------------------- ------------------------------------------------ ------------------------------------------------- -------------------------- -------------------------------------------- ---------------------------


internal_revenue_service number release date index number ------------------------------------ ------------------------------------------ ----------------------------- ---------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------------- id no -------------- telephone number ---------------------- refer reply to cc psi b4 plr-115094-15 date september legend decedent decedent’s estate executor accountant date dear ---------------- ----------------------------- -------------------------------------------------------------------- ---------------------- ------------------ ------------------------ this responds to your personal representative's letter of date requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to file a form_8939 allocation of increase in basis for property_acquired_from_a_decedent to make an election under sec_1022 of the internal_revenue_code sec_1022 election and to allocate basis to eligible_property transferred as a result of decedent's death the facts and representations submitted are as follows decedent died in the executor of decedent's_estate retained accountant to advise them on estate_tax matters and prepare the necessary tax filings for the decedent’s estate accountant failed to advise executor that notice_2011_66 required the executor of an estate to file form_8939 before date for a decedent who died in on date a date shortly after the due_date of date accountant prepared and filed form_8939 the form was rejected due to the late filing consequently executor failed to make a sec_1022 election for decedent's_estate executor of decedent’s estate is requesting an extension of time pursuant to sec_301_9100-3 to file the form_8939 to make the sec_1022 election to allocate basis provided by sec_1022 to eligible_property transferred as a result of decedent’s death plr-115094-15 law and analysis sec_1022 provides that property_acquired_from_a_decedent who died after date is treated as transferred by gift and the basis of the person acquiring the property from such a decedent is the lesser_of the adjusted_basis of the decedent or the fair_market_value of the property at the date of the decedent's death sec_1022 provides in general that the basis_of_property under sec_1022 is increased by basis increase that is allocated to the property sec_1022 provides in general that basis increase is the portion of the aggregate basis increase that is allocated to the property sec_1022 and c provide that the aggregate basis increase is dollar_figure and that the aggregate basis increase is increased by- i the sum of the amount of any capital_loss_carryover under sec_1212 and the amount of any net_operating_loss_carryover under sec_172 that would but for the decedent's death be carried from the decedent's last taxable_year to a later taxable_year of the decedent plus ii the sum of the amount of any losses that would have been allowable under sec_165 if the property acquired from the decedent had been sold at fair_market_value immediately before the decedent's death sec_1022 provides that in the case of property that is qualified spousal property the basis of such property under sec_1022 as increased under sec_1022 is increased by spousal property basis increase allocated to the property sec_1022 provides in general that spousal property basis increase is the portion of the aggregate spousal property basis increase which is allocated to the property sec_1022 provides that the aggregate spousal property basis increase is dollar_figure sec_1022 provides in general that the basis_of_property acquired from a decedent may be increased under sec_1022 or c only if the property was owned by the decedent at the time of death sec_1022 describes property that is considered to be owned by the decedent at the time of death sec_1022 provides that the basis adjustments under sec_1022 and c shall not increase the basis of any interest in property above its fair_market_value in the hands of the decedent as of the date of the decedent's death plr-115094-15 sec_1022 provides in general that the executor is to allocate the basis adjustments under sec_1022 and c on the return required by sec_6018 and that any allocation made may be changed only as provided by the secretary sec_1022 describes property that is considered to be acquired from the decedent for purposes of sec_1022 subtitle a of title v of the economic_growth_and_tax_relief_reconciliation_act_of_2001 p l stat enacted sec_2210 which made chapter the estate_tax inapplicable to the estate of any decedent who died in and chapter the generation skipping transfer gst tax inapplicable to generation-skipping transfers made in on date the tax relief unemployment insurance reauthorization and job creation act of truirjca p l stat became law and sec_301 of truirjca retroactively reinstated the estate and gst taxes however sec_301 of truirjca allows the executor of the estate of a decedent who died in to elect to apply the code as though sec_301 of truirjca did not apply with respect to chapter and for property acquired or passing from a decedent within the meaning of sec_1014 thus sec_301 of truirjca allows the executor of the estate of a decedent who died in to elect not to have the provisions of chapter apply to the decedent's_estate but rather to have the provisions of sec_1022 apply notice_2011_66 2011_35_irb_184 section i a provides that the executor of the estate of a decedent who died in makes the sec_1022 election by filing a form_8939 on or before date notice_2011_76 2011_40_irb_479 extended the due_date of the form_8939 and thus the election from date to date notice_2011_66 section i d provides that the internal_revenue_service will not grant extensions of time to file a form_8939 and will not accept a form_8939 filed after the due_date except in four limited circumstances provided in section i d under this section of notice_2011_66 an executor may apply for relief under sec_301_9100-3 sec_301_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose date is prescribed by a regulation and not expressly provided by statute requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government plr-115094-15 sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied therefore executor of decedent's_estate is granted an extension of time of days from the date of this letter to make the sec_1022 election on a form_8939 and allocate additional basis to eligible_property as provided by sec_1022 a copy of this letter should be attached to the form_8939 except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination 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 melissa c liquerman chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury washington dc person to contact telephone number refer reply to cc tege eoeg teb-plr-120068-00 date date number release date index number legend company iso county state issuer date a b bonds 1992a bonds 1992b bonds dear this letter responds to a request on behalf of the company by your representative for a ruling about whether certain of the company’s facilities will qualify as facilities for the local furnishing of electric energy within the meaning of sec_142 of the internal_revenue_code_of_1986 as amended the 1986_code after the transactions described below facts generally the issuer is a city and political_subdivision of state it is authorized by its charter and by enabling ordinances to issue revenue bonds and loan the proceeds to the company the company is an investor-owned regulated_public_utility or iou which among other things provides electric energy to customers the native load customers within an electric service area consisting of county the electric service area the public service commission of the state the commission acting pursuant to state statute regulates the company’s provision of retail electric service sets rates and requires it to provide electric service to all those within its electric service area that request such service plr-120068-00 prior to date the company wholly owned and operated a physically integrated system of generating transmission and distribution facilities for electric energy located within the electric service area that provided electric service throughout this area the local system facilities the local system facilities were not designed differently sized larger built sooner or constructed in a more costly manner than necessary to serve the customers in the electric service area they consist of land and property subject_to the depreciation allowance provided in sec_167 the company has financed certain improvements and additions to its local system facilities with the proceeds of the 1992a and 1992b bonds electric industry restructuring on date the company contributed a majority of its local high voltage transmission assets consisting of substations lines with capacity of a kv or greater related real_property easements permits and warranties the hvt assets to a newly formed state-wide independent system operator for transmission of electric power the iso the company retained the remainder of its local system facilities a its local electric distribution system b its local generating units c certain local high voltage transmission lines with capacity greater or equal to a kv that are used as distribution lines by high voltage customers and d lines regardless of capacity that channel power in only one direction and also are used as distribution lines the local system facilities less the contributed hvt assets are referred to herein as the retained facilities the company represents that less than percent of the 1992a bond proceeds and less than percent of the bond proceeds were used to finance the contributed hvt assets the 1992b bonds were issued in order to refund the bonds following the transaction on date the company operated and intends to continue to operate the retained facilities as it has in the past and expects to be a net importer of electric energy with respect to these facilities the commission will require the company to use the retained facilities to provide retail electric power to all customers in its electric service area in conjunction with the transfer the company acquired shares of common_stock in the iso representing approximately b percent of the iso’s outstanding_stock this equity_interest is in proportion to the value of the company’s property contribution relative to the total value of the property contributed to the iso by all of its members law and analysis in general sec_103 of the 1986_code provides that gross_income does not include interest on any state_or_local_bonds sec_103 sets forth that this exclusion does not apply to any private_activity_bond that is not a qualified_bond within the meaning of sec_141 of the code sec_141 defines qualified_bond to include an exempt_facility_bond plr-120068-00 sec_142 provides that the term exempt_facility_bond includes any bond issued as part of an issue percent or more of the net_proceeds of which are to be used to provide facilities_for_the_local_furnishing_of_electric_energy_or_gas for purposes of sec_142 sec_142 provides that the local furnishing of electric energy or gas shall only include furnishing solely within the area consisting of a city and one contiguous county or two contiguous counties under sec_103 of the internal_revenue_code of the code the predecessor to sec_142 interest_paid on an issue of obligations issued by a state_or_local_governmental_unit is not includable in gross_income if substantially_all of the proceeds of such issue are to be used to provide facilities for the local furnishing of electric energy sec_1_103-8 of the income_tax regulations issued under sec_103 sets forth that substantially_all of the proceeds of an issue of governmental obligations are used to provide an exempt facility if percent or more of such proceeds are so used sec_1_103-8 provides that in order to qualify as an exempt facility for the purposes of sec_103 and thus sec_142 a facility must serve or be available on a regular basis for general_public use or be a part of a facility so used for purposes of applying the public use test in sec_1_103-8 sec_1_103-8 provides that a facility for the local furnishing of electric energy or gas is available for use by the general_public if a the owner or operator of the facility is obligated by a legislative enactment local ordinance regulation or the equivalent thereof to furnish electric energy or gas to all persons who desire such services and who are within the service area of the owner or operator of such facility and b it is reasonably expected that such facility will serve or be available to a large segment of the general_public in such service area sec_1_103-8 provides that the term facilities_for_the_local_furnishing_of_electric_energy_or_gas means property which -- a is either property of a character subject_to the allowance for depreciation provided in sec_167 or land b is used to produce collect generate transmit store distribute or convey electric energy or gas c is used_in_the_trade_or_business of furnishing electric energy or gas and 1to the extent not amended the congress intended that principles of law under the code continue apply under the 1986_code h conf rept vol ii at ii-686 vol c b plr-120068-00 d is a part of a system providing service to the general populace of one or more communities or municipalities but in no event more than contiguous counties or a political equivalent whether or not such counties are located in one state a facility for the generation of electric energy otherwise qualifying under this subdivision will not be disqualified because it is connected to a system for interconnection with other utility systems for the emergency transfer of electric energy the facilities need not be located in the area served by them revrul_83_56 1983_1_cb_22 rev_rul provides guidance for determining whether an asset of a utility is a facility for the local furnishing of electricity within the meaning of sec_103 of the code the ruling concludes that a proposed hydroelectric generating plant was not a facility for the local furnishing of electricity because the plant was part of a regional electrical system serving customers in multiple counties the ruling also concludes that the system described under sec_1_103-8 means the public_utility and the facilities needed to produce and deliver electricity to customers within the utility’s service area as referred to in sec_1_103-8 and sec_1_103-8 revrul_80_11 1980_1_cb_22 rev_rul describes a local public_utility that through its existing distribution system was in the business of furnishing gas to its customers that were located solely within two contiguous counties the ruling held that certain specified additions improvements and replacements of the existing distribution system are facilities for the local furnishing of gas within the meaning of former sec_103 because they satisfied the requirements under sec_1_103-8 for purposes of sec_1_103-8 the local system described under revrul_80_11 was a gas distribution system that furnished gas to its customers solely within two contiguous counties the gas utility’s local distribution system relied on accessing gas through regional pipelines the distribution system then delivered the gas to customers within its service area this arrangement is analogous to an electric distribution system where a local distribution system accesses electricity through interconnections to regional transmission lines and generators the company has requested the following rulings that the transfer of all of its hvt assets will not cause the retained facilities to be other than facilities for the local furnishing of electric energy as defined in sec_142 of the 1986_code and the regulations thereunder that the company’s acquisition of a minority stock interest in the iso in return for the transfer of the hvt assets will not cause the retained facilities to be plr-120068-00 other than facilities for the local furnishing of electric energy as defined in sec_142 and the regulations thereunder the essential issue to be decided with respect to the company’s first ruling_request is whether the retained facilities meet the requirements to be facilities for the local furnishing of electric energy the company is a regulated_public_utility that is authorized and required to provide electricity to all those who request it in its electric service area and thus satisfies the exempt facility public use requirements set forth under sec_1_103-8 and sec_1_103-8 in addition it represents that the retained facilities will consist of property of a character subject_to the depreciation allowance provided in sec_167 and land and thus meets the requirement under sec_1_103-8 the retained facilities also meet the requirements under sec_1_103-8 and c as they are used to distribute electric energy in the course of the company’s trade_or_business of furnishing electric energy the company’s electric service area qualifies under sec_142 because it consists only of county the retained facilities also meet the requirements of sec_1 f iii d they are a part of a system providing electric service to the general population in the electric service area similar to the gas distribution system described under revrul_80_11 the company will integrate the retained facilities with access to generation and transmission capacity through its interconnections with other utilities deliver the electricity to its native load customers through its distribution lines and will be a net annual importer of electric energy therefore we conclude that the company’s retained facilities qualify as facilities for the local furnishing of electric energy the second ruling_request asks whether ownership by the company of a minority stock interest in the iso will impair its status as a system for the local furnishing of electricity under sec_142 on the condition that the company’s ownership_interest will not permit the iso to change the way that the company’s retained facilities have been operated and are expected to be operated in the future ownership of b percent of common_stock in the iso will not cause the company’s system to be other than facilities for the local furnishing of electricity conclusion based upon the facts and representations outlined in this letter and in the taxpayer’s submissions and provided the foregoing conditions are met the transfer of the hvt assets to the iso and the company’s b percent equity_interest in the iso will not cause the company’s retained facilities to be other than facilities for the local furnishing of electric energy for purposes of sec_142 of the 1986_code and the regulations thereunder plr-120068-00 except as specifically set forth above we express no opinion concerning the federal tax consequences of the above described facts specifically we express no opinion concerning whether the interest on the 1992a or 1992b bonds issued to finance the taxpayer’s facilities is excludable from gross_income under sec_103 this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent by sincerely assistant chief_counsel exempt_organizations employment_tax government entities timothy l jones assistant branch chief tax exempt bonds branch


internal_revenue_service department of the treasury index number u i l washington dc number release date person to contact telephone number refer reply to cc dom p si br 5-plr-120273-98 date date legend agency department taxpayer state a city b corporation c plr-120273-98 project a b c d e f g h i j k l m n o dear this letter responds to your letter of date and subsequent letters submitted by your and taxpayer’s authorized representatives requesting a private_letter_ruling under sec_42 of the internal_revenue_code and sec_1_42-13 of the income_tax regulations to correct an administrative error in an allocation of the low-income_housing_credit dollar amounts taxpayer and agency represent that the facts are as follows taxpayer is a state plr-120273-98 a limited_partnership that was formed to construct develop and operate the project a multi-family low_income_housing_project in city b pursuant to sec_42 the general_partner of the taxpayer is corporation c agency is an agency of the department the governor of state a assigned responsibility for the administration of the low-income_housing tax_credit program to the department within the department the low-income_housing tax_credit project is administered by the agency in connection with the development of the project taxpayer made application_for a reservation of low-income_housing tax_credits from agency dated a the project consists of n multi-family building and a garage carriage house unit in the rear both of which share the same address the application provided that there were m buildings containing a total of b units the garage carriage house is detached from the multi- family building and upon completion of rehabilitation will contain o low income units taxpayer also executed a binding agreement and election statement dated c which provides that the project had m buildings the utilization affidavit dated d which was provided to the agency indicated that there was n address but did not specify the number of buildings the agency relied on the utilization affidavit in making its determination that there was only n building and the carryover allocation of low-income_housing tax_credit that was issued by the agency to the project on e assigned only n building_identification_number bin to the project in error there has been no change in the site plan or design of the project and the project contains the same number of units b the same number of low income units f the same mix of one two and three bedroom units as called for under the original plan and each unit consists of the same square footage as provided in the original plan the project is expected to be completed by g the agency issued the carryover allocation in the amount of dollar_figureh per year to the project based upon the project’s building plan of m buildings investor’s counsel upon its review of the tax_credit documents discovered in i that only n bin had been issued to the project in error soon after taxpayer was made aware that the carryover allocation had included only n bin in error and in j taxpayer notified agency that the error had occurred on or about k taxpayer and agency agreed that a letter_ruling would be required in connection with the above statement of facts agency represents that it issued a project-based allocation to the project pursuant to sec_42 the number of buildings in the project was not material to the allocation for the project and the fact that the project had m residential buildings rather than n would not have plr-120273-98 affected a the amount of credit allocated to the project b the ranking of the project in the agency’s l allocation round or c any other aspect of the carryover allocation for the project agency and taxpayer request the internal_revenue_service to rule that agency can amend the l carryover allocation agreement with taxpayer to include a bin for each of the m buildings in the project as required under sec_1_42-13 agency and taxpayer hereby agree to such conditions as the secretary considers appropriate if the above ruling_request is granted under sec_42 state and local housing_credit agencies may correct administrative errors and omissions concerning allocations and recordkeeping within a reasonable period of time after their discovery sec_1_42-13 defines an administrative error or omission as a mistake that results in a document that inaccurately reflects the intent of the agency at the time the document is originally completed or if the mistake affects a taxpayer a document that inaccurately reflects the intent of the agency and the affected taxpayer at the time the document is originally completed sec_1_42-13 however provides that an administrative error or omission does not include any misinterpretation of the applicable rules and regulations under sec_42 in the present case agency committed an administrative error when the l carryover allocation failed to reference m buildings this error was not a misinterpretation of the applicable rules and regulations under sec_42 however this error did result in a document ie l carryover allocation that did not accurately reflect the intent of agency and taxpayer at the time the document was executed the intent of agency was to allocate the same amount of credit to the project notwithstanding the number of buildings in the project further the change does not affect the amount of housing_credit_dollar_amount allocated to the project nor the ranking of the project in agency’s l allocation round nor any other aspect of the carryover allocation for the project thus a correctable administrative error occurred in this situation under the represented facts the l carryover allocation is the credit allocating document pursuant to sec_1_42-13 an agency must obtain the secretary’s prior approval to correct an administrative error or omission if the correction is not made before the close of the calendar_year of the error or omission and the correction requires a numerical change to the credit_amount allocated for a building or project in the present case the correction would involve a numerical change to the credit_amount allocated to the n building that received a bin based solely on the representations and the relevant law and regulations set plr-120273-98 forth above we rule as follows agency committed an administrative error when it issued n bin instead of m bin s for the project because of that administrative error the l carryover allocation inadvertently reflects the intent of agency and taxpayer when the l carryover allocation was executed agency will correct the administrative error within a reasonable period of time after agency became aware of the administrative error and agency will issue n additional bin to accurately reflect that there are m buildings in the project to correct this administrative error agency must do the following amend the l carryover allocation to include a bin for the n additional building in the project and to allocate the appropriate amount of low-income_housing tax_credit to each of the m buildings in the project not exceeding dollar_figureh for the entire project the new bin does not have to be in sequential order with the existing n bin and the existing n bin shall continue in effect on the amended l carryover allocation agency should indicate that it is making the correction under sec_1_42-13 and attach a copy of the amended l carryover allocation to an amended form_8610 annual low-income_housing_credit agencies report for l and file the amended form_8610 with the service when completing the amended form_8610 agency should follow the specific instructions on the form_8610 under the heading amended reports no opinion is expressed or implied regarding the application of any other provisions of the code or regulations specifically we express no opinion on whether the project qualifies for the low-income_housing tax_credit under sec_42 nor the validity of costs included in the project’s eligible_basis under the power_of_attorney on file we are sending copies of this ruling to agency’s authorized representative to taxpayer and to taxpayer’s authorized representative plr-120273-98 this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely kathleen reed kathleen reed senior technician reviewer branch office of the assistant chief_counsel passthroughs and special industries enclosure copy of this letter copy for sec_6110 purposes


office_of_chief_counsel internal_revenue_service memorandum number release date cc pa 02mabond postf-140420-12 uilc date date to bobbie semkova attorney cc lb_i f man from pamela w fuller senior technician reviewer procedure administration third party communication none date of communication not applicable subject timeliness of claims for refund under sec_34 and sec_6511 this chief_counsel_advice responds to your request for assistance this advice may not be used or cited as precedent legend x y dollar_figurea dollar_figureb year year year --------------------------------------------------- ----------- -------------- -------------- ------ ------ ------ postf-140420-12 issues whether x’s claims for refund of income_tax for tax years year and year are barred under the look back provisions of sec_6511 conclusions no x’s claims are not barred by the look back provisions because the tax was deemed paid on the statutory due dates of the respective year and year income_tax returns which dates are within the three-year period preceding the claims facts background x is a ----------------- corporation not subject_to federal_income_tax under a tax_treaty x is also exempt from certain fuel excise_taxes under certain circumstances and provided that proper documentation for the exemption exists in year and year due to mismatched documentation x was improperly charged an amount equal to the excise_tax on aviation_fuel by y an oil company in the amounts of dollar_figurea and dollar_figureb respectively the tax imposed by sec_4081 had previously been imposed on this fuel as a result x could have been entitled to payments as an ultimate_purchaser of the aviation_fuel by sec_6427 but x did not meet the timing requirements of i x sought relief under sec_34 to receive a refundable income_tax_credit in lieu of payment under sec_6427 sec_34 provides for such a credit equal to the amount otherwise payable under sec_6427 x filed claims for refund of income_tax in the amounts of dollar_figurea and dollar_figureb for tax years year and year respectively on october year law and analysis sec_6511 contains two separate timeliness provisions that apply to claims for refund first sec_6511 establishes a filing deadline on the claim_for_refund which is three years from the time the return was filed or two years from the time the tax was paid whichever expires later or if no return was filed by the taxpayer within two years from the time the tax was paid second sec_6511 limits the amount of the refund based on looking back either two or three years from the date the claim is filed hof v united_states wl pincite d s d citing 516_us_235 where as in this case a tax_return is filed the deadline for filing a claim_for_refund is three years from the date the tax_return is filed or two years from payment whichever is later sec_6511 postf-140420-12 in this case x filed income_tax returns forms 1120-f on october year the forms 1120-f contained x’s claims for refund x’s simultaneous filing of income_tax returns and claims for refund for year and year meets the three-year requirement of sec_6511 x timely filed both its year and year claims where a claim is filed within such three-year period under sec_6511 the look back period is the three-year period preceding the claim plus any extension of time for filing the tax_return sec_6511 under sec_6511 the amount of the credit or refund may not exceed the portion of the tax paid within this look back period determining the tax paid date for purposes of sec_6511 is less straightforward in this case sec_34 gives taxpayers a refundable_credit against income_tax without requiring any income_tax to have been actually paid this credit is allowable even though x did not have any income_tax_liability see sec_6401 and c for purposes of establishing the tax paid date we analogize to the earned_income_tax_credit eitc another refundable_credit where the taxpayer frequently has never actually paid any income_tax but is still entitled to a refund of income_tax when determining the period of limitation for claiming a refund based on the eitc courts have deemed a constructive_payment of income_tax and have deemed this constructive_payment to occur as of the statutory due_date of the income_tax return for the tax_year at issue see 356_f3d_221 2d cir the rationale for this constructive_payment analysis is grounded in the recognition that the eitc creates an overpayment of taxes where there has been no actual payment of the tax at issue id pincite in determining the tax paid date the second circuit found sec_6513 was applicable the court analogized the eitc to wage withholding taxes and concluded that a logical and consistent reading of the code demanded that sec_6513 apply to both those amounts a taxpayer did pay and those a taxpayer did not in fact pay the court further noted that the purpose of the sec_6511 look back rule is to prevent stale claims and that its holding that sec_6513 is applicable supported congresses’ intent id pincite in this case in lieu of an individual taxpayer who would have taxable wages and therefore wage withholding we analogize to the generic corporate taxpayer who would have taxable_income and therefore estimated_tax payments both withholding and estimated_tax payments are considered pre-paid income_tax and both are subject_to sec_6513 given the courts’ analysis of tax paid in the eitc refund context we pursuant to revrul_69_406 1969_2_cb_261 a taxpayer must file its claim_for_refund under sec_34 on an income_tax return regardless of whether or not it must otherwise file an income_tax return note x’s payment to y of an amount equal to y’s excise_tax liability is not relevant for sec_6511 purposes because x is seeking a refund of income_tax under sec_34 while the constructive_payment is a legal fiction it is a necessary one because without it the code’s refundable_credit provisions would be unworkable postf-140420-12 believe they would similarly hold that there is a constructive_payment of income_tax when a taxpayer has a sec_34 refundable_credit and that said payment is deemed paid as of the statutory due_date of a corporation’s income_tax return the income_tax return_due_date for a corporation such as x is march of the year following the taxable_year thus x’s constructive payments under sec_34 are deemed paid as of that date with respect to tax_year year x filed its claim_for_refund on october year under sec_6511 the year refund is limited to the portion of tax paid within the applicable look back period of three years under the analysis above there is a constructive_payment of income_tax in the amount of dollar_figurea deemed paid on march year this is within the applicable look back period with respect to tax_year year x filed its claim_for_refund on october year under sec_6511 the year refund will be limited to the portion of tax paid within the applicable look back period of three years under the analysis above there is a constructive_payment of income_tax in the amount of dollar_figureb deemed paid on march year as with the tax_year year claim this is within the applicable look back period in sum x’s claims for refund are timely under sec_6511 and are not barred by the look back provisions of sec_6511 because the tax was deemed paid on the statutory due dates of the year and year income_tax returns march year and march year respectively which dates are within the three-year period preceding the claims this writing may contain privileged information any unauthorized disclosure of this writing may undermine our ability to protect the privileged information if disclosure is determined to be necessary please contact this office for our views please call if you have any further questions


internal_revenue_service number release date index number --------------------------------------- ----------------------- ------------------------------------------ - --------------------------------------------------- --------------- ------------- ---------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------- id no ------------- telephone number --------------------- refer reply to cc psi plr-142018-05 date may -------------------------------------------------------------------------------- --------------------------------------------------------------- ----------------------------------------------------- -------------------------------------------------- ------------------------------------------------------------------ legend h w trust ----------------------------------------------------------- trust ----------------------------------------------------------- trust -------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- date date grandchild grandchild grandchild year year year year dear -------------- ------------------- -------------------------- ------------------------ -------------------- ------------------------------ ------- ------- ------- ------- plr-142018-05 this is in response to your letter dated date submitted on your behalf by your authorized representative and other correspondence regarding the gift_tax and generation-skipping_transfer gst tax consequences of certain transfers to trusts the facts and representations submitted are summarized as follows on date h and w established two separate irrevocable trusts trust and trust for the benefit of grandchild and grandchild respectively on date h and w established a third irrevocable_trust trust for the benefit of grandchild the terms of trusts are substantially identical but for the identity of the grandchild for whom the trust was established the primary beneficiary under the terms of each trust the trustee may distribute any part or all of the income and principal of the trust to or for the benefit of the primary beneficiary during the primary beneficiary’s lifetime if the primary beneficiary is not living then to the extent the trust corpus is not appointed by the primary beneficiary as discussed below the trustee may distribute any part or all of the income and corpus to the primary beneficiary’s descendants or if none then to the primary beneficiary’s siblings and their descendants or if none then to other beneficiaries who may include non-skip persons as defined in sec_2613 each trust provides that the trustee is to make distributions as the trustee shall deem to be in the best interest of the beneficiary or beneficiaries grantor does not intend that such distributions be limited to the amounts necessary for maintenance education and support with respect to trust sec_1 and if the primary beneficiary dies prior to reaching age the corpus is to be distributed pursuant to the primary beneficiary’s exercise of a testamentary general power to appoint the accumulated income and corpus of trust to certain person’s and entities including the primary beneficiary’s estate with respect to trust if the primary beneficiary dies prior to reaching age the primary beneficiary may with the consent of a trustee who is not an adverse_party by written instrument delivered to the trustee appoint the accumulated income and corpus of trust to the primary beneficiary’s estate a trustee who is not an adverse_party is defined in trust as a trustee who is a person not having a substantial interest in the trust estate which is adverse to the exercise of the power in favor of the primary beneficiary if there is no such trustee then acting trust provides a procedure for designating such trustee upon reaching age the primary beneficiary has the right to terminate their respective trust if the primary beneficiary exercises this right the trust assets will be distributed to the primary beneficiary in fee simple and free of trust if the primary beneficiary does not exercise this right within days after receiving notice the right to terminate will lapse if the primary beneficiary does not exercise the termination power then each trust continues after the primary beneficiary reaches age the trustee’s authority to plr-142018-05 make discretionary distributions to the primary beneficiary continues as described above upon the primary beneficiary’s death the trust corpus is to be distributed pursuant to the primary beneficiary’s exercise of a testamentary special power to appoint trust income and corpus to h and w’s descendants after the primary beneficiary reaches age any person may make a contribution to the trust and grant to any of h’s and w’s descendants the right to withdraw property from the trust equal to the lesser_of the greater of dollar_figure or of the aggregate value of the trust principal or the beneficiary’s proportionate share of the contribution based on the number of beneficiaries with withdrawal rights this right will lapse if it is not exercised within days after the beneficiary receives notice of the contribution the trustee is directed to segregate any part of the trust property to which gst_exemption was allocated the exempt portion any exempt portion shall be held by the trustee as a separate trust with the same terms conditions and name as the trust from which it was segregated provided that the exempt portion shall have a zero inclusion_ratio as defined in sec_2642 all trusts created under the trust agreement will terminate on the day preceding the expiration of years from the death of the last survivor of the following persons living on the date of trust is executed h and w h’s and w’s children and other descendants of h and w and all persons who are mentioned by name in the trust agreement and all of their descendants upon termination the assets of trust will be delivered and distributed in fee simple and free of trust to the income beneficiaries at the time of termination it is represented that h and w made transfers of cash to trust sec_1 and in years and to trust in years in each case the transfer made in a calendar_year to each trust did not exceed the gift_tax annual exclusion for that year under sec_2503 grandchild and are all currently under the age of the following rulings have been requested each of trusts satisfies the requirements of sec_2503 from the date of its inception through the date the primary beneficiary reaches age the contribution period accordingly all contributions to trust sec_1 and in years and to trust in years were excluded from h’s and w’s total gifts for federal gift_tax purposes further all future contributions to each of trusts during the contribution period will be excluded from h’s and w’s total gifts for federal gift_tax purposes except to the extent any contributions exceed the amount described in sec_2503 each of trusts is a skip_person with respect to h and w within the meaning of sec_2613 during the contribution period accordingly all contributions by h and w to trusts in years and to trust in years were direct skips within plr-142018-05 the meaning of sec_2612 and any further contributions by h and w to trusts during this period will be direct skips h’s and w’s unused gst_exemption was automatically allocated to contributions by h and w to trust sec_1 and in years and trust in years to the extent necessary to make the inclusion_ratio for such property zero in accordance with sec_2632 sec_2501 imposes a tax on the transfer of property by gift during each calendar_year by any individual sec_2511 provides that the gift_tax imposed by sec_2501 applies whether the transfer is in trust or otherwise whether the gift is direct or indirect and whether the property is real or personal tangible or intangible interests in property made to any person by the donor during the calendar_year the first dollar_figure adjusted for inflation as provided in sec_2503 of such gifts to such person shall not be included in the total_amount_of_gifts made during such year sec_2503 provides that in the case of gifts other than gifts of future sec_25_2503-3 of the gift_tax regulations provides that no part of the sec_2503 provides that no part of a gift to an individual who has not value of a gift of a future_interest may be excluded in determining the total_amount_of_gifts made during the calendar_period future_interest is a legal term and includes reversions remainders and other interests or estates whether vested or contingent and whether or not supported by a particular interest or estate which are limited to commence in use possession or enjoyment at some future date or time sec_25_2503-3 provides that an unrestricted right to the immediate use possession or enjoyment of property or the income from property such as a life_estate or term certain is a present_interest in property an exclusion is allowable with respect to a gift of such an interest attained the age of years on the date of the transfer shall be considered a gift of a future_interest in property for purposes of sec_2503 if the property and the income therefrom may be expended by or for the benefit of the donee before his attaining the age years and will to the extent not so expended pass to the donee on his attaining the age of years and in the event the donee dies before attaining the age of years be payable to the estate of the donee or as he may appoint under a general_power_of_appointment as defined in sec_2514 sec_2503 by reason of the mere fact that there is left to the discretion of a trustee the determination of the amounts if any of the income or property to be expended for the benefit of the minor and the purpose for which the expenditure is to be made provided there are no substantial restrictions under the terms of the trust instrument on sec_25_2503-4 provides in part that a transfer does not fail to satisfy plr-142018-05 the exercise of such discretion the donee upon reaching age has the right to extend the term of the trust or the governing instrument contains a disposition of the property or income not expended during the donee’s minority to persons other than the donee's estate in the event of the default of appointment by the donee revrul_74_43 1974_1_cb_285 holds that a gift in trust for the benefit of a minor beneficiary satisfies the requirements of sec_2503 where the trust provides that the beneficiary has upon reaching age either a continuing right to compel immediate distribution of the trust corpus by giving written notice to the trustee or to permit the trust to continue by its own terms or a right during a limited period to compel immediate distribution of the trust corpus to the beneficiary which if not exercised will permit the trust to continue by its own terms accordingly a transfer to the trust will constitute a gift of a present_interest qualifying for the annual exclusion under sec_2503 sec_2514 provides that the exercise or release of a general power of sec_2514 defines general_power_of_appointment as a power exercisable appointment created after date shall be deemed a transfer of property with respect to the individual possessing the power in favor of the individual possessing the power the individual’s estate or the creditors of either in general under sec_2514 a power exercisable by the possessor in conjunction with another person is a general_power_of_appointment if the person whose joinder is required does not have a substantial interest in the property subject_to the power which is adverse to the exercise of the power in favor of the decedent sec_2514 provides that the lapse of a power_of_appointment created after date during the life of the individual possessing the power shall be considered a release of such power however this rule applies with respect to the lapse of powers during any calendar_year only to the extent that the property which could have been appointed by exercise of such lapsed powers exceeded in value at the time of such lapse the greater of the following amounts a dollar_figure or b percent of the aggregate value at the time of such lapse of the assets out of which or the proceeds of which the exercise of the lapsed powers could have been satisfied sec_2601 imposes a tax on every generation-skipping_transfer gst a gst sec_2612 provides that the term direct_skip means a transfer subject is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip to a tax imposed by chapter or of an interest in property to a skip_person sec_2613 provides that the term skip_person means a natural_person assigned to a generation which i sec_2 or more generations below the generation assignment of the transferor or a_trust if all interests in such trust are held by skip persons plr-142018-05 under sec_2652 and sec_26_2612-1 of the generation-skipping_transfer_tax regulations a person has an interest in a_trust if a person has a present right to receive trust principal or income is a permissible current recipient of trust principal or income and is not described in sec_2055 or is described in sec_2055 and the trust is a charitable_remainder_annuity_trust or unitrust as defined in sec_664 or a pooled_income_fund as defined in sec_642 be the value of the property received by the transferee sec_2623 provides that the taxable_amount in the case of a direct_skip shall sec_2602 provides that the amount of the tax is the taxable_amount multiplied by the applicable_rate sec_2641 defines applicable_rate as the product of the maximum_federal_estate_tax_rate and the inclusion_ratio with respect to the transfer under sec_2642 the inclusion_ratio with any property transferred in a generation-skipping_transfer is generally defined as the excess of over the applicable_fraction the applicable_fraction as defined in sec_2642 is a fraction in which the numerator is the amount of gst_exemption under sec_2631 allocated to the trust or to property transferred in a direct_skip and the denominator is the value of the property transferred to the trust or involved in the direct_skip sec_2654 provides that for purposes of gst tax the portions of a_trust attributable to transfers from different transferors shall be treated as separate trusts and substantially separate and independent shares of different beneficiaries in a_trust shall be treated as separate trusts sec_2631 as in effect for gst transfers before date provides that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption of dollar_figure adjusted for inflation under sec_2631 which may be allocated by such individual or his executor to any property with respect to which such individual is the transferor for gst transfers after date the gst_exemption amount is equal to the applicable_exclusion_amount under sec_2010 sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable sec_2632 provides that any allocation by an individual of his or her gst_exemption under sec_2631 may be made at any time on or before the date prescribed for filing the estate_tax_return for such individual’s estate determined with regard to extensions regardless of whether such a return is required to be filed sec_2632 provides that if any individual makes a direct_skip during his lifetime any unused portion of such individual's gst_exemption shall be allocated to the property transferred to the extent necessary to make the inclusion_ratio for such property zero if the amount of the direct_skip exceeds such unused portion the entire unused portion shall be allocated to the property transferred sec_2632 provides that for purposes of sec_2632 the unused portion of an individual's gst plr-142018-05 exemption is that portion of such exemption which has not previously been allocated by such individual or treated as allocated under sec_2632 or sec_2632 sec_2642 provides in part that if the allocation of the gst_exemption to any transfers of property is deemed to be made under sec_2632 or c the value of such property for purposes of sec_2642 shall be its value as finally determined for purposes of chapter within the meaning of sec_2001 such allocation shall be effective on and after the date of such transfer in this case the terms of trusts provide that the trustee may make discretionary distributions of corpus and income to grandchild grandchild or grandchild respectively until the beneficiary reaches age if the grandchild dies before reaching age the corpus is to be distributed pursuant to the grandchild’s exercise of a general_power_of_appointment upon reaching age the respective grandchild has the right to terminate his or her trust and receive the accumulated income and corpus free of trust however if the grandchild does not terminate the trust then the trust continues for the benefit of the grandchild based upon the information submitted and the representations made we conclude as follows from the date of its inception through the date the primary beneficiary reaches age the contribution period each of trusts satisfies the requirements of sec_2503 accordingly h’s and w’s contributions to trust sec_1 and in years and to trust in years are excluded from the respective donor’s total gifts for federal gift_tax purposes further all of h’s and w’s future contributions to each of trusts during the contribution period will be excluded from the respective donor’s total gifts for federal gift_tax purposes except to the extent any contributions exceed the amount described in sec_2503 each of trusts is a skip_person with respect to h and w within the meaning of sec_2613 during the contribution period accordingly all contributions by h and w to trust sec_1 and in years and to trust in years were direct skips within the meaning of sec_2612 and any further contributions by h and w to trusts during this period will be direct skips in accordance with sec_2632 h’s and w’s unused gst_exemption was automatically allocated to contributions by h and w to trust sec_1 and in years and trust in years to the extent necessary to make the inclusion_ratio for such property zero except as specifically ruled herein we express or imply no opinion on the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter under the cited provisions or under any other provisions of the code no opinion is expressed or implied concerning the application of sec_2642 to trusts plr-142018-05 the rulings contained in this letter are based upon information and representations submitted by the taxpayers and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination this ruling is directed only to the taxpayer s requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely george l masnik branch chief branch passthroughs special industries enclosures copy for sec_6110 purposes copy of this letter cc


number release date id office uilc cca_2010072214512650 ---------------- from --------------- sent thursday date pm to ------------------ cc ------------------------------------------- subject issue pending cam as you know we received a request for advance consent from taxpayer to make a protective change in its method_of_accounting cam for certain obligations for the year tax_year for the reasons stated below we will not process taxpayer's request ------- if you have any questions please contact me at ------------ background taxpayer and the director disagree as to whether for the year taxable_year taxpayer requested consent to change its method_of_accounting for certain obligations from method a to method b under the automatic method change procedures taxpayer began using method b for the obligations in year and continued to use method b for the obligations in succeeding taxable years however for the year taxable_year taxpayer is requesting permission to change its method_of_accounting to continue using method b for the obligations issue can the service grant taxpayer’s request to change its method_of_accounting in year analysis revproc_97_27 1997_1_cb_680 as modified by revproc_2002_19 2002_1_cb_696 only applies to a taxpayer that is requesting permission to change its method_of_accounting sec dollar_figure of revproc_97_27 in this case taxpayer has been using method b since year and therefore is considered to have adopted method b by virtue of having used it on two consecutive tax returns sec_2 of revproc_2002_18 2002_1_cb_678 therefore taxpayer’s request does not involve a change because taxpayer wishes to continue using method b taxpayer argues that its current method_of_accounting is method a because that is the method the director argues taxpayer should be using however a service-imposed change is not considered final and therefore a taxpayer is not treated as using the service-imposed method by virtue of the director’s position on audit see section of revproc_2002_18 accordingly taxpayer is outside the scope of revproc_97_27 conclusion taxpayer’s year application to change its method_of_accounting for certain obligations is outside the scope of revproc_97_27 and therefore will be returned to taxpayer


internal_revenue_service department of the treasury index number washington dc number release date person to contact telephone number refer reply to cc dom p si 1-plr-120034-98 date date legend x date this responds to a letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts x was incorporated on date the shareholders of x desired that x elect s_corporation treatment for x effective on date but the election to be treated as an s_corporation was not timely filed accordingly x requests a ruling that it will be treated as an s_corporation effective date law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective sec_1362 provides in relevant part that if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made under sec_1362 however if an s election is made after the first two and one-half months of a corporation's taxable_year then that corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is filed cc dom p si 1-plr-120034-98 sec_1362 provides that if no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and sec_1362 shall not apply x did not file an election to be treated as an s_corporation under sec_1362 x has however established reasonable_cause for not making a timely s election and is entitled to relief under sec_1362 conclusion based solely on the facts submitted and the representations made and provided that x otherwise qualifies as an s_corporation we conclude that x will be treated as an s_corporation effective date within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as specifically set forth above no opinion is expressed or implied as to the federal_income_tax consequences of the transaction described above under any other provision of the code specifically no opinion is expressed concerning whether x is in fact an s_corporation for federal tax purposes this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely signed daniel j coburn daniel j coburn assistant branch chief branch assistant chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury index number washington dc number release date person to contact telephone number refer reply to cc dom p si 1-plr- date date legend x date date this responds to a letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts x was incorporated on date the two shareholders of x desired that x elect s_corporation treatment for x effective on date but the election to be treated as an s_corporation was not timely filed accordingly x requests a ruling that it will be treated as an s_corporation effective date law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective sec_1362 provides in relevant part that if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made under sec_1362 however if an s election is made after the first two and one-half months plr- of a corporation’s taxable_year then that corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is filed sec_1362 provides that if no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and sec_1362 shall not apply x did not file an election to be treated as an s_corporation under sec_1362 x has however established reasonable_cause for not making a timely s election and is entitled to relief under sec_1362 conclusion based solely on the facts submitted and the representations made and provided that x otherwise qualifies as an s_corporation we conclude that x will be treated as an s_corporation effective date within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as specifically set forth above no opinion is expressed or implied as to the federal_income_tax consequences of the transaction described above under any other provision of the code specifically no opinion is expressed concerning whether x is in fact an s_corporation for federal tax purposes this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayer signed david r haglund sincerely david r haglund senior technician reviewer branch office of the assistant chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


of f i c e of c h i ef c ou n sel department of the treasury i n t e r n al r e v e n u e s e r v i c e w ashington d c date cc ita b01 ------------- genin-151001-08 number info release date uil --------------- ----------------------------------- ---------------------------- dear ----- -------- thank you for your e-mail dated date in which you ask whether an appraiser is a qualified_appraiser of donated property within the meaning of the internal_revenue_code if the appraiser after appraising the donated property brokers the sale of the donated property on behalf of the donee i hope the following general information is helpful sec_170 of the internal_revenue_code code addresses the term qualified_appraiser sec_1_170a-13 of the income_tax regulations lists categories of persons who cannot be qualified appraisers for example under sec_1 170a- c iv the following cannot be qualified appraisers for the appraised property the donor of the property a party to the transaction in which the donor acquired the property the donee of the property a person employed by related to or married to any of the above persons or any person who does a majority of his or her appraisals for any of the above persons under the code and regulations the mere fact that an appraiser of donated property subsequently acts as a broker of the donated property is not a disqualifier notice_2006_96 provides transitional guidance on the sec_170 definition of qualified_appraiser but does not address your question on date the internal_revenue_service published proposed_regulations that clarify the substantiation and reporting requirements for cash and noncash charitable_contribution deductions sec_1_170a-17 of the proposed_regulations lists genin-151001-08 qualified_appraiser exclusions disqualifiers this list is substantially_similar to the current regulations the proposed_regulations are not currently in effect because they have not yet been published as final regulations a hearing on the proposed_regulations was held on date after comments provided at that hearing are fully considered the regulations will be finalized if you have any questions please feel free to contact me at --------------------- or ----------- --------------at --------------------- sincerely karin g gross senior technician reviewer branch income_tax accounting