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 b02 plr-148100-08 date date legend x ---------------------- ---------------------------- a --------------------- b ----------------------- trust1 -------------------------------------- ------------------------------------------------------------------------------------------------ trust2 ------------------------------------------------------------------------------------- ------------------------------------------------------------------------------- ------------------------------------------------------------------------------------ ----------------------------------- trust3 ------------------------------------------------------------------------------------- ------------------------------------------------------------------------------- ---------------------------------------------------------------------------------- ----------------------------------- state ---------- date1 ----------------------- date2 ---------------------- date3 ------------------ date4 ---------------------- plr-148100-08 date5 ---------------------- date6 ------------------- date7 ---------------------- date8 ------------------ a ------ b ---- dear ------------ this responds to a letter dated date and subsequent correspondence submitted on behalf of x by x’s authorized representative requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated under the laws of state1 on date1 and elected to be an s_corporation effective date2 on or about date3 a established trust1 on date4 and date5 a contributed shares of x stock to trust1 a died on date6 upon the death of a trust2 and trust3 were established pursuant to the trust agreement including amendments for trust1 and the x stock held by trust1 was divided and transferred to trust2 and trust3 on date7 after the transfers of x stock to trust2 and trust3 trust2 owned a percent of the outstanding shares of x and trust3 owned b percent of the outstanding shares of x b the surviving_spouse of a was the current income_beneficiary of trust2 and trust3 until b’s death b died on date8 x represents that prior to a’s death on date6 trust1 was a_trust described in sec_1361 x further represents that between date6 and date7 trust1 was a_trust described in sec_1361 x also represents that trust2 and trust3 met the requirements to be treated as qualified subchapter_s trusts qssts as described in sec_1361 from date7 until the death of b on date8 except that b failed to make the required elections under sec_1361 therefore trust2 and trust3 were not eligible s_corporation shareholders beginning on date7 as a result x’s s_corporation_election terminated on date7 x represents that x and x’s shareholders have filed tax returns consistent with x being an s_corporation x also represents that all of the income with respect to the stock of x held by trust2 and trust3 has been consistently reported by b on b’s plr-148100-08 individual federal tax returns as if the qsst elections for trust2 and trust3 had been in effect since date7 x further represents that the circumstances resulting in the termination of x’s s_corporation_election were inadvertent and were not motivated by tax_avoidance or retroactive tax planning x and each person who was or is a shareholder of x at any time since date7 agree to make any adjustments consistent with the treatment of x as an s_corporation as may be required by the secretary with respect to such period sec_1361 provides that the term s_corporation means with respect to any taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 provides that a small_business_corporation means a domestic_corporation that is not an ineligible_corporation and that does not have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual sec_1362 provides that except as provided in sec_1362 a small_business_corporation may elect in accordance with the provisions of sec_1362 to be an s_corporation sec_1362 provides that an election under sec_1362 shall be terminated whenever at any time on or after the first day of the first taxable_year for which the corporation is an s_corporation such corporation ceases to be a small_business_corporation a termination of an s_corporation_election under sec_1362 is effective on or after the date of cessation sec_1362 provides that if an election under sec_1362 by any corporation was terminated under sec_1362 or the secretary determines that the circumstances resulting in such termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in the termination steps were taken so that the corporation is a small_business_corporation and the corporation and each person who was a shareholder of the corporation at any time during the period specified under sec_1362 agrees to make the adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary for that period then notwithstanding the circumstances resulting in such termination the corporation shall be treated as an s_corporation during the period specified by the secretary based solely on the facts submitted and the representations made we conclude that x’s s_corporation_election terminated on date7 resulting from the failure of b as the current income_beneficiary of trust2 and trust3 to make the required elections under sec_1361 we further conclude that the termination was inadvertent within the meaning of sec_1362 in addition we conclude that pursuant to the provisions of sec_1362 x will be treated as an s_corporation from date7 and thereafter provided that plr-148100-08 trust2 and trust3 qualify as qssts and x’s election to be an s_corporation was otherwise valid and was not terminated under sec_1362 for other reasons accordingly the shareholders of x must include in income their pro_rata share of the separately_stated and nonseparately computed items of x as provided in sec_1366 make any adjustments to basis as provided in sec_1367 and take into account any distributions made by x as provided in sec_1368 for this purpose b shall be treated as the shareholder of x with respect to the stock of x held by trust2 and trust3 for the period beginning date7 until date8 if x or its shareholders fail to treat x as described above this letter_ruling shall be null and void this ruling is conditioned on b’s personal representative or the administrator of b’s estate filing qsst elections under sec_1361 with respect to trust2 and trust3 effective date7 with the appropriate service_center within days from the date of this letter a copy of this letter should be attached to the qsst elections except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code including whether x was or is a small_business_corporation under sec_1361 whether trust1 was a_trust described in sec_1361 prior to date6 whether trust1 was a_trust described in sec_1361 for the period beginning date6 until date7 or whether trust2 and trust3 qualified as qssts within the meaning of sec_1361 for the period beginning date7 until date8 in addition no opinion is expressed regarding the valuation of any of the assets includible in b’s gross_estate this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office copies of this letter are being sent to x’s authorized representatives sincerely melissa c liquerman branch chief branch office of associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service department of ts treasury index number washington dc person to contact telephone number refer reply to cc dom p si 03-plr-1 ate date legend company corporation state a o o l b e s i i o i t t a h t l u u u se plr-107408-99 '199946029 dear this letter responds to a letter dated d5 on behalf of company requesting relief under sec_1362 of the internal_revenue_code facts according to the information submitted company was incorporated under the laws of state on d1 and elected to be treated as an s_corporation as defined in sec_1361 effective on d1 on d2 company converted to a limited_partnership under the laws of state with the shareholders a and b retaining their proportionate interests pursuant to the conversion corporation also contributed cash to company in exchange for an interest for purposes of local taw corporation was considered the sole genera partner while a and b were considered limited partners however all interests provided identical rights to operating and liquidating distributions on or about d3 company filed a form_8832 entity classification election electing to be classified as an association_taxable_as_a_corporation for all federal tax purposes effective for the start of its existence as a state law limited_partnership company represents that the conversion was a reorganization within the meaning of sec_368 in conjunction with the preparation of the form_8832 company became aware that corporation was an ineligible shareholder on d4 a and b acting through their respective disregarded limited_liability companies acquired corporation’s interest in company company did not know that admitting corporation as a general_partner would terminate its s election company's admission of corporation was not motivated by federal_income_tax avoidance or retroactive federal_income_tax planning company and each of its shareholders who were shareholders during the termination period agree to make any adjustments consistent with the treatment of company as an corporation law and analysis company converted from a corporation to a limited_partnership under the laws of state and elected under sec_301_7701-3 to be classified as an association_taxable_as_a_corporation for federal tax purposes company has represented that the conversion qualified as a reorganization under sec_368 if the conversion qualified as a reorganization under sec_368 then the conversion would not have terminated plr-107408-99 company's s_corporation_election provided company still met the requirements of an s_corporation under sec_1361 see revrul_64_250 1964_2_cb_333 sec_1361 defines an s_corporation as a small_business_corporation for which an election under sec_1362 is in effect for the taxable_year sec_1361 provides that a small_business_corporation means a domestic_corporation that is not an ineligible_corporation and that does not have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual sec_1362 specifies that a corporation’s election under sec_1362 will terminate whenever at any time on or after the first day of the first taxable_year for which the corporation is an s_corporation such corporation ceases to be a small_business_corporation sec_1362 provides in part that if an election under sec_1362 by any corporation was terminated under sec_1362 or the secretary determines that the circumstances resulting in such termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in the termination steps were taken so that the corporation is a small_business_corporation and the corporation and each person who was a shareholder of the corporation at any time during the period specified pursuant to sec_1362 agrees to make the adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary for that period then notwithstanding the circumstances resulting in such termination the corporation shail be treated as an s_corporation during the period specified by the secretary conclusion after applying the relevant law to the facts submitted and the representations made we conclude that company's election to be an s_corporation terminated as of d2 when corporation acquired an interest in company we also hold that the termination was inadvertent within the meaning of sec_1362 we further hold that under the provisions of sec_1362 company will be treated as an s_corporation during the period of d2 through_d4 and thereafter provided company's s_corporation_election does not otherwise terminate under sec_1362 accordingly in determining their federal tax_liability for the period from d2 to d4 the shareholders a and and corporation must include their pro_rata share of the separately and nonseparately computed items of company under sec_1366 make adjustments to stock basis under sec_1367 and take into account any distributions made plr-107408-99 '199946029 by company under sec_1368 if company a b or corporation fail to treat company as described above this ruling shall be null and void except as specifically set forth above we express no opinion concerning the federal tax consequences of the transactions described above under any other provision in the code in particular no opinion is expressed on whether the conversion qualified as a reorganization under sec_368 this ruling is directed only to the taxpayer that requested it sec_6110 provides that it may not be used or cited as precedent sincerely yours signed wiliam p o'bhsa william p o'shea chief branch office of the assistant chief_counsel passthroughs and 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 corp b02 plr-124754-13 date date legend parent --------------------------------------------------------------------------------------------------------------- subsidiary --------------------------------------------------------------------------------------------------------------- ---------------------- subsidiary --------------------------------------------------------------------------------------------------------------- ----------------------- date --------------------------- company official --------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------- --------------------------- tax professional --------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------- ----------------------------------------------------- dear --------------- this is in response to a letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-1 through of the procedure and administration regulation to file an election parent is requesting an extension to file an election under sec_1_1502-21 of the income_tax regulations to relinquish the entire carryback period for the consolidated_net_operating_loss cnol of the consolidated_group of which parent is the common parent for the tax_year ended plr-124754-13 date the information submitted in that request and subsequent submissions is summarized below parent is the common parent of a consolidated_group parent group which incurred a cnol for the tax_year ended date date cnol parent group is comprised of parent subsidiary and subsidiary parent intended to relinquish the carryback period for the date cnol but a valid election was not filed parent then submitted this request for an extension of time to file a valid election parent has represented that the parent group has not carried back and will not carry back any portion of the date cnol to a prior consolidated_return_year of parent group it has also been represented by appropriate parties that none of the date cnol attributable to subsidiary or subsidiary has been carried back or will be carried back to a separate_return_year within the meaning of sec_1_1502-1 of the subsidiaries furthermore parent has represented that parent group is not seeking to alter a return position for which an accuracy related penalty has been or could be imposed under sec_6662 of the internal_revenue_code code at the time parent requests relief and the new position requires or permits a regulatory election for which relief is requested sec_1_1502-21 provides that a consolidated_group may make an irrevocable election to relinquish the entire carryback period with respect to a cnol for any consolidated_return_year the election is made in a separate statement entitled this is an election under sec_1_1502-21 to waive the carryback period pursuant to sec_172 for the insert consolidated_return_year cnols of the consolidated_group of which insert name and employer_identification_number of common parent is the common parent sec_1_1502-21 also provides that the statement must be filed with the group’s income_tax return for the consolidated_return_year in which the loss arises under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but not more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections requests 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 plr-124754-13 in this case the time for filling the election is fixed by the regulations ie sec_1_1502-21 therefore the commissioner has discretionary authority under sec_301_9100-1 to grant an extension of time for parent to file the election provided parent shows it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file the election the information establishes that parent relied upon a qualified_tax professional who failed to make or advise parent to make the election and that the request for relief was filed before the failure to make the election was discovered by the internal_revenue_service see sec_301_9100-3 and v based on the facts and information submitted including the representations that have been made we conclude that parent has shown it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly we grant an extension of time under sec_301_9100-3 until days from the date on this letter for parent to file the election with respect to the relinquishment of the entire carryback period for the date cnol as described above the above extension of time is conditioned on parent group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been made timely taking into account the time_value_of_money no opinion is expressed as to parent group’s tax_liability for the years involved a determination thereof will be made upon audit of the federal_income_tax returns involved further no opinion is expressed as to the federal_income_tax effect if any if it is determined that parent group’s liability is lower sec_301_9100-3 parent should file the election in accordance with sec_1_1502-21 parent group’s returns must be amended to attach the election statement required by sec_1_1502-21 a copy of this letter should be attached to the election statement alternatively if parent files its returns electronically it may satisfy this latter requirement by attaching a statement to its return that provides the date and control number of this letter_ruling except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the code or regulations or as to the tax treatment of any conditions existing at the time of or effects resulting from filing the election late that are not specifically set forth in the above ruling plr-124754-13 for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made by parent company official and tax professional however the director should verify all essential facts moreover notwithstanding that an extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable continue to apply this ruling is directed only to the taxpayer s who requested 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 copies of this letter are being sent to your authorized representatives sincerely __________________ ken cohen senior technician reviewer branch office of associate chief_counsel corporate cc


internal_revenue_service number release date index numbers ---------------------------------------------------- --------------------------------- ---------------------- --------------------------------- 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 b03 plr-142106-07 date date x legend --------------------------------------------------------------------------------------------------- ------------------------ ------------------------- country ------- date dear ---------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election under sec_301_7701-3 to be classified as a partnership for federal tax purposes facts x is an entity organized under the laws of country x intended to elect to be classified as a partnership for federal tax purposes effective date however due to an oversight form_8832 entity classification election was not timely filed law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in sec_301_7701-3 an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301_7701-2 or a partnership and an eligible_entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner plr-142106-07 sec_301_7701-3 provides that except as provided in sec_301_7701-3 unless the entity elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be sec_301_7701-3 provides that an election made under classified other than as provided under sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election is filed sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government sec_301_9100-3 provides that requests for relief subject_to sec_301_9100-3 conclusion based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of sixty days from the date of this letter to elect to be classified as a partnership for federal tax purposes effective date the election plr-142106-07 should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to the election except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent letter is being sent to your authorized representatives in accordance with the power_of_attorney on file with this office a copy of this the ruling contained in this letter is 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 ruling_request it is subject_to verification on examination sincerely s william p o'shea associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


significant index number department of the treasury internal_revenue_service washington d c zozad eqveanment entities division aug setter pasaz re taxpayer dear this letter constitutes notice that approval has been granted for your request for 6-year automatic extansion for amortizing the unfunded liabilities ae of duty for the above-named plan which are described in sections b b and bx4 of the internal_revenue_code code and sec_304 b 2xb and b of the employee_retirement_income_security_act_of_1974 ‘erisa this extension is effect ve with the plan_year beginning july this extension applies to the amortization change bases as identified in your application submission estabilshed as of date wih a total outetanding balance of dollar_figure as of that data the extension of the amortization periods of the unfunded liabilities of tha plan was granted in accordance with sec_431 d of the code sec_431 a of tha code requires the secretary to extend the period of time required to amariize any unfunded llabilily of a plan for a period of time not in excess of years if the plan submits an application meeting the criteria stated in sec_431 dx b the plan nas submitted the required information to meet the criteria in sec_431 xb including cartification from the plan's actuary that absent the extension under suoparagraph a the plan would have an accumulated_funding_deficiency in the current plan_year of any of the succeeding plan years gi the plan_sponsor has adopted a plan to improve the plan's funding status hi the plan is projectad to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period as extended and iv the notice required under paragraph a has been provided ‘we have sent a copy of this letter to the and to your authorized representative pursuant to a power of attomey on file in this office to the this ruling is directed only to the taxpayer that requested it sec_6110 of the internal_revenue_code provides that it may not be used or clted by others aa precedent mf you require further assistance in this matter please contact sincerely yours caving’ moines for david m zlegler manager ep actuarlal group


internal_revenue_service number release date index number ------------------------------ ------------------------------- ------------------------------------------ ---------------------------- ------------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------- id no ------------------ telephone number --------------------- refer reply to cc corp b02 plr-135954-13 date date legend distributing ------------------------------------------ --------------------------------------- ------------------------------------------------------------ controlled --------------------------------------------------------------------- ------------------------------------------------------------ ---------------------------------------------------- sub --------------------------------------------------------------------- ------------------------------------------------------------ -------------------- sub ------------------------------- --------------------------------------------------------------------- ------------------------------------------------------------ dre ------------------------------------------------------------------------------------- ---------------------------------------------------- ------------------------------------- dre ------------------------------------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------ plr-135954-13 dre ------------------------------------------------------------------------------------- ---------------------------------------------------- ------------------------------------------ dre ------------------------------------------------------------------------------------- ---------------------------------------------------- ------------------------------------------- dre --------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- ------------- company a --------------------------------------------------------------------- ------------------------------------------------------------ ----------------------------- distributing series a-1 stock --------------------------------------------------------------------------------- -------------- distributing series a-2 stock --------------------------------------------------------------------------------- -------------- distributing series a-3 stock --------------------------------------------------------------------------------- -------------- distributing series a-4 stock --------------------------------------------------------------------------------- ---------------------- distributing series b-1 stock --------------------------------------------------------------------------------- -------------- distributing series b-2 stock --------------------------------------------------------------------------------- -------------- distributing series b-3 stock --------------------------------------------------------------------------------- -------------- distributing series b-4 stock --------------------------------------------------------------------------------- ---------------------- controlled series a stock plr-135954-13 controlled series b stock distributing business --- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- ------------------------------- controlled business ------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------ --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- ------------------------ group group ------------------------------ --------------------------- recapitalization --------------------------------------------------------------------------------- ------------------------- recapitalization --------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- - -------------------------- rights offering --------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------------------------- ------------------------------------------------------------- transition services -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --- --------------------------------------------------------------------------------------------------------------- transition_period ------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------- plr-135954-13 state a b c d e f g h date date date date -------------- -- ------------------------ ------------------------ ------------------------------------- ------------------------------------------ ---- ----------------- -- -------------------- --------------------- ------------------- ---------------------------- dear ----------------------- this letter responds to your date request for rulings on certain federal_income_tax consequences of a series of proposed transactions the information submitted in that letter and in later correspondence is summarized below the rulings contained in this ruling letter are based on facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by the appropriate party this office has not verified any of the materials submitted in support of the request for rulings verification of the information representations and other data may be required as part of the audit process in particular this office has not reviewed any information pertaining to and has made no determination regarding whether the spin-off as defined below i satisfies the business_purpose requirement of sec_1_355-2 of the income_tax regulations the regulations ii is being used principally as a device for the distribution of the earnings_and_profits of the distributing_corporation or the controlled_corporation or both plr-135954-13 see sec_355 of the internal_revenue_code the code and sec_1_355-2 or iii is part of a plan or series of related transactions pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest in the distributing_corporation or the controlled_corporation see sec_355 and sec_1_355-7 summary of facts distributing is the common parent of an affiliated_group_of_corporations that files a consolidated federal_income_tax return distributing has outstanding a series of publicly- traded common_stock i the distributing series a-1 stock and the distributing series b-1 stock together the distributing serie sec_1 stock which reflect the economic_performance of its group activities and ii the distributing series a-2 stock and the distributing series b-2 stock together the distributing serie sec_2 stock which reflect the economic_performance of its group activities distributing through its separate_affiliated_group as defined in sec_355 the distributing sag is engaged in various business activities including the distributing business and the controlled business following the spin-off the distributing sag will continue to conduct the distributing business and controlled through its separate_affiliated_group as defined in sec_355 the controlled sag will conduct the controlled business distributing wholly owns dre dre wholly owns controlled dre dre and dre dre wholly owns sub dre wholly owns sub dre owns b of the company a stock representing c of the voting power with respect to the election of directors of the company a stock controlled will wholly own dre after its formation each of dre through dre is and dre will be upon its formation an entity disregarded as separate from its owner under sec_301_7701-3 all of the entities described above are domestic financial information has been submitted which indicates that each of the distributing business and the controlled business has had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the past five years in transactions unrelated to the proposed transactions as defined below distributing effected recapitalization on date and recapitalization together with recapitalization the recapitalizations on date which included a related rights offering distributing believes that each of the recapitalizations qualified as a reorganization under sec_368 management of distributing believes that the spin-off will help achieve the following corporate business purposes i to increase the aggregate trading price of the stock of distributing and controlled when compared with the stock of distributing plr-135954-13 without the spin-off which is expected to provide controlled with a significantly more attractive acquisition currency and enable distributing and controlled to more efficiently and effectively compensate their officers and employees and ii to facilitate a combination of controlled and company a collectively the corporate business purposes the proposed transactions to effect the spin-off distributing has proposed the following series of related transactions collectively the proposed transactions i ii iii iv v vi dre formed controlled on date and controlled changed its name to its current name on date controlled currently has outstanding a single class of common_stock dre will distribute its entire_interest in sub to dre distributing’s entire_interest in sub held indirectly through dre will be reattributed from group to group and cash equal to the fair_market_value of such interest will be reattributed from group to group dre will distribute its entire_interest in company a to dre all intercompany payables and receivables existing between dre and sub will be netted and dre will cause i the full amount of any net intercompany receivables due to dre from sub to be contributed to the capital of sub and ii the full amount of any net intercompany receivables due to sub from dre either to be paid_by dre or to be distributed by sub to dre after which it will be immediately extinguished dre will contribute its entire_interest in sub and company a cash and certain agreements and other assets generally related to sub or company a to controlled in exchange for i the assumption by controlled of certain liabilities the assumed_liabilities ii the distributed loan proceeds as defined below and iii stock constructively issued by controlled collectively the contribution vii dre will distribute all of the outstanding_stock of controlled to distributing viii controlled will form dre under state law and contribute all of the shares of company a that it receives in the contribution to dre dre may be formed earlier in the sequence of steps comprising the proposed transactions plr-135954-13 ix x xi dre will borrow d in cash pursuant to a loan the loan from one or more third parties and distribute the proceeds of the loan the loan proceeds to controlled controlled will distribute all but e of the loan proceeds to distributing the distributed loan proceeds in a transaction that distributing believes will qualify as a reorganization under sec_368 controlled will i file an amended and restated certificate of incorporation pursuant to which controlled’s outstanding common_stock will be recapitalized into controlled series a stock and controlled series b stock and ii issue to distributing the number of shares of each series necessary to effect the spin-off as defined below xii distributing will distribute on a pro_rata basis i all of the controlled series a stock to the holders of distributing series a-2 stock and ii all of the controlled series b stock to the holders of distributing series b-2 stock collectively the spin-off xiii in a transaction that distributing believes will qualify as a reorganization under sec_368 distributing may reclassify its outstanding_stock by filing an amended and restated certificate of incorporation pursuant to which i each share of distributing series a-1 stock will be exchanged for one share of distributing series a-3 stock and a fraction of a share of distributing series a-4 stock ii each share of distributing series b-1 stock will be exchanged for one share of distributing series b-3 stock and a fraction of a share of distributing series b-4 stock and iii each share of distributing serie sec_2 stock will be modified in certain respects collectively the reclassification this step xiii if effected may occur earlier in the sequence of steps comprising the proposed transactions xiv within f months following the spin-off and pursuant to the plan_of_reorganization distributing will use all of the distributed loan proceeds to repurchase shares of distributing stock pursuant to distributing’s share repurchase program such repurchases will be made pursuant to a special authorization by the distributing board_of directors the distributed loan proceeds will be held in a separate bank account until distributed by distributing pursuant to this step xiv in connection with the spin-off distributing and controlled or certain of their respective subsidiaries will enter into agreements to provide for i transition services during the transition_period the services agreement and ii the allocation of tax_liabilities and related tax matters distributing and controlled will also enter into a reorganization agreement to implement the principal corporate transactions required to effect the spin-off and related restructuring transactions together with the agreements plr-135954-13 described in the preceding sentence the transition agreements the transition agreements will include certain indemnification provisions that may require distributing and controlled and or their respective subsidiaries to make indemnity payments to each other following the spin-off any such payments the indemnity payments as part of the transitional arrangements entered into in connection with the spin- off dre will provide a contingent line of credit to controlled pursuant to which controlled would have the right contingent upon the occurrence of certain events under the loan to borrow up to an aggregate principal_amount of g from dre the dre credit arrangement the dre credit arrangement will have a term of no more than h years following the date of the spin-off and will have commercially reasonable terms comparable to arm’s length terms negotiated in the open market as a result of the spin-off each of the compensatory stock_options restricted shares of stock and stock appreciation rights together the equity rights with respect to the distributing serie sec_2 stock that are outstanding at the time of the spin-off will be adjusted or converted in a manner designed to reflect the intrinsic value of such equity rights at the time of the spin-off collectively the equity rights adjustments representations the following representations have been made regarding the contribution and the spin-off any indebtedness owed by controlled to distributing after the spin-off will not constitute stock_or_securities no part of the consideration to be distributed by distributing in the spin-off will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of distributing except as contemplated by the equity rights adjustments no part of the consideration to be distributed by distributing will be received by a security holder as an employee or in any capacity other than that of a security holder of distributing distributing and controlled will treat all members of their respective separate affiliated groups as defined in sec_355 as one corporation in determining whether the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business are satisfied the five years of financial information submitted on behalf of the distributing business conducted by the distributing sag is representative of the present business operations of the distributing business conducted by the distributing sag and with regard to the distributing business there have been no plr-135954-13 substantial operational changes since the date of the last financial statements submitted the five years of financial information submitted on behalf of the controlled business conducted by the distributing sag is representative of the present business operations of the controlled business conducted by the distributing sag and with regard to the controlled business there have been no substantial operational changes since the date of the last financial statements submitted the distributing sag neither acquired the distributing business nor acquired control of an entity conducting the distributing business during the five-year period ending on the date of the spin-off in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part the distributing sag neither acquired the controlled business nor acquired control of an entity conducting the controlled business during the five-year period ending on the date of the spin-off in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part following the spin-off except as contemplated by the services agreement the distributing sag and the controlled sag will each continue the active_conduct of its business independently and with its separate employees the spin-off is being carried out for the corporate business purposes the spin-off is motivated in whole or substantial part by one or more of the corporate business purposes the spin-off is not being used principally as a device for the distribution of the earnings_and_profits of distributing or controlled or both the total adjusted bases and the fair_market_value of the assets transferred to controlled in the contribution exceeds the sum of i the amount of liabilities assumed within the meaning of sec_357 by controlled in connection with the contribution ii the amount of any liabilities owed to controlled by distributing that are discharged or extinguished in connection with the contribution and iii the amount of cash and the fair_market_value of any other_property other than stock and securities permitted to be received under sec_361 without the recognition of gain received by distributing in connection with the contribution any liabilities assumed within the meaning of sec_357 by controlled in the contribution were incurred in the ordinary course of business and are associated with the assets being transferred plr-135954-13 no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the spin-off except for payables arising under the transition agreements any indebtedness potentially arising under the dre credit arrangement or indebtedness otherwise arising in the ordinary course of business immediately before the spin-off items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations distributing’s excess_loss_account with respect to the controlled stock if any will be included in income immediately before the spin-off except for any indemnity payments payments made in connection with all continuing transactions between distributing and controlled will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the contribution and the spin-off will be an investment_company as defined in sec_368 and iv for purposes of sec_355 immediately after the spin-off no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the spin-off this representation is based on the determination that none of distributing’s shareholders will be aggregated under sec_355 as a result of recapitalization recapitalization or the rights offering for purposes of sec_355 immediately after the spin-off no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the spin-off or ii attributable to distributions on distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the spin-off this representation is based on the determination that none of distributing’s or controlled’s shareholders will be aggregated under sec_355 as a result of recapitalization recapitalization or the rights offering plr-135954-13 the spin-off is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled including any predecessor or successor of any such corporation immediately after the spin-off either i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in the stock of distributing or controlled who did not hold such an interest immediately before the spin- off or ii neither distributing nor controlled will be a disqualified_investment_corporation within the meaning of sec_355 distributing controlled and the shareholders of distributing will pay their respective expenses if any incurred in connection with the contribution and the spin-off the distribution of controlled stock to distributing’s shareholders in the spin- off is with respect to their ownership of distributing stock any money property or stock contributed by distributing to controlled in the contribution will be exchanged solely for stock_or_securities in controlled the assumed_liabilities and the distributed loan proceeds the distributing series a-1 stock the distributing series b-1 stock the distributing series a-2 stock and the distributing series b-2 stock constitute stock of distributing for u s federal_income_tax purposes following the reclassification if effected the distributing series a-2 stock the distributing series b-2 stock the distributing series a-3 stock the distributing series b-3 stock the distributing series a-4 stock and the distributing series b-4 stock will constitute stock of distributing for u s federal_income_tax purposes rulings based solely on the information submitted and the representations set forth above and provided that i the distribution of controlled stock to distributing’s shareholders in the spin-off is with respect to their ownership of distributing stock ii any money property or stock contributed by distributing to controlled in the contribution is exchanged solely for stock_or_securities in controlled the assumed_liabilities and the distributed loan proceeds and iii any other transfer of stock money or property between distributing controlled or any distributing shareholder and any person related to distributing controlled or any distributing shareholder other than repurchases by distributing of shares of distributing stock with the distributed loan proceeds pursuant plr-135954-13 to the proposed transactions is respected as a separate transaction we rule as follows regarding the contribution and the spin-off the contribution followed by the spin-off will be a reorganization within the meaning of sec_368 distributing and controlled will each be a_party_to_a_reorganization within the meaning of sec_368 distributing will not recognize any gain_or_loss on the contribution sec_361 and b a and a controlled will not recognize any gain_or_loss on the contribution sec_1032 controlled’s basis in each asset received from distributing in the contribution will equal the basis of such asset in the hands of distributing immediately before the contribution sec_362 controlled’s holding_period in each asset received from distributing in the contribution will include the holding_period during which distributing held such asset sec_1223 distributing will not recognize any gain_or_loss on the spin-off sec_361 the holders of distributing serie sec_2 stock will not recognize any gain_or_loss and will not otherwise include any amount in income upon receipt of the controlled stock in the spin-off sec_355 each distributing shareholder’s basis in the distributing serie sec_2 stock and the controlled stock following the spin-off will equal the basis of the distributing serie sec_2 stock that the shareholder held immediately before the spin-off allocated between the distributing serie sec_2 stock and the controlled stock in proportion to their respective fair market values in accordance with sec_1_358-2 sec_358 a - c each distributing shareholder’s holding_period in the controlled stock received in the spin-off will include the holding_period of the distributing serie sec_2 stock with respect to which the distribution is made provided that the shareholder holds such distributing serie sec_2 stock as a capital_asset on the date of the spin-off sec_1223 earnings_and_profits will be allocated between distributing and controlled in accordance with sec_312 and sec_1_312-10 and sec_1_1502-33 any indemnity payments made by distributing to controlled or vice versa that i have arisen or will arise for a taxable_period ending on or before the spin-off or for a taxable_period beginning on or before and ending after the spin-off and ii will not have become fixed and ascertainable until after the plr-135954-13 spin-off will be treated as occurring immediately before the spin-off see 344_us_6 revrul_83_73 c b following the spin-off controlled will not be a successor of distributing for purposes of sec_1504 therefore controlled and its direct and indirect subsidiaries that are includible corporations under sec_1504 and satisfy the ownership requirements of sec_1504 will be members of an affiliated_group_of_corporations entitled to file a consolidated u s federal_income_tax return with controlled as the common parent caveats no opinion is expressed about the federal_income_tax treatment of the proposed transactions under other provisions of the code and regulations or the tax treatment of any conditions existing at the time of or effects resulting from the proposed transactions that are not specifically covered by the above rulings in particular no opinion is expressed regarding i ii whether the spin-off satisfies the business_purpose requirement of sec_1_355-2 whether the spin-off is being used principally as a device for the distribution of the earnings_and_profits of the distributing_corporation or the controlled_corporation or both see sec_355 and sec_1_355-2 iii whether the spin-off is part of a plan or series of related transactions pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest in the distributing_corporation or the controlled_corporation see sec_355 and sec_1_355-7 iv v the federal_income_tax consequences of the equity rights adjustments and except as otherwise necessary to the rulings herein the federal_income_tax consequences of steps ii through v vii through ix xi and xiii procedural matters this ruling letter is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent a copy of this letter must be attached to any federal_income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this plr-135954-13 requirement by attaching a statement to their return that provides the date and control number of this letter in accordance with a power_of_attorney on file in this office a copy of this letter is being sent to your authorized representatives sincerely ____________________________________ gerald b fleming senior technician reviewer branch office of the associate chief_counsel corporate


internal_revenue_service department of the treasury number release date index number washington dc person to contact cc intl br1-plr-100648-01 date date legend a date b country c year d this is in response to a’s letter dated date requesting a ruling under sec_877 of the internal_revenue_code_of_1986 code that a’s loss of long-term_resident status did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code the information submitted for consideration is substantially as set forth below the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for a ruling it is subject_to verification on examination a is a long-term permanent resident_of_the_united_states within the meaning of sec_877 who relinquished his u s lawful permanent resident status expatriated a became a permanent resident_of_the_united_states and obtained his green card in year d a expatriated to country c where he has been a citizen all his life on date b on that date his net_worth exceeded the net_worth required under sec_877 sec_877 generally provides that a citizen who loses u s citizenship or a u s long-term_resident who ceases to be taxed as a lawful permanent resident individuals who expatriate within the 10-year period immediately preceding the close of the taxable_year will be taxed under sec_877 and the special rules of sec_877 plr-100648-01 for such taxable_year unless such loss did not have for one of its principal purposes the avoidance of u s taxes sec_2107 and sec_2501 provide special estate and gift_tax regimes respectively for individuals who expatriate with a principal purpose to avoid u s taxes a former citizen or former long-term_resident will be treated as having expatriated with a principal purpose to avoid u s taxes for purposes of sec_877 sec_2107 and sec_2501 if the individual’s average income_tax_liability or the individual’s net_worth on the date of expatriation exceed certain thresholds see sec_877 sec_2107 and sec_2501 a former citizen or former long-term_resident whose net_worth or average tax_liability exceeds these thresholds however will not be presumed to have a principal purpose of tax_avoidance if that person is described within certain statutory categories and submits a request for a ruling within one year of the date of loss of u s citizenship for the secretary’s determination as to whether such loss had for one of its principal purposes the avoidance of u s taxes see sec_877 sec_2107 and sec_2501 a c under notice_98_34 1998_2_cb_29 modifying notice_97_19 1997_1_cb_394 a former long-term_resident whose net_worth or average tax_liability exceeds the applicable thresholds will not be presumed to have a principal purpose of tax_avoidance if that former resident is described within certain categories and submits a complete and good_faith request for a ruling as to whether such loss had for one of its principal purposes the avoidance of u s taxes notice_98_34 requires that certain information be submitted with a request for a ruling that an individual’s expatriation did not have for one of its principal purposes the avoidance of u s taxes a is eligible to request a ruling pursuant to notice_98_34 because a became not later than the close of a reasonable period after his expatriation a resident fully liable to income_tax in country c the country of his birth a submitted all the information required by notice_98_34 including additional information requested by the service after review of the submission accordingly based on the facts submitted and the representations made we conclude that a has made a complete and good_faith submission in accordance with sec_877 and notice_98_34 we further conclude that a will not be treated under sec_877 as having as one of his principal purposes of expatriating the avoidance of u s taxes because the information submitted clearly establishes the lack of a principal purpose to avoid taxes under subtitle a or b of the code except as expressly provided herein no opinion is expressed or implied plr-100648-01 concerning the tax consequences of any transaction or item discussed or referenced in this letter in addition no opinion is expressed as to a’s u s tax_liability for taxable periods prior to his loss of permanent resident status or for taxable periods after his loss of permanent residence status under sections of the code other than sec_877 sec_2107 and sec_2501 a copy of this letter must be attached to a’s u s income_tax return for the year in which a obtained the ruling whether or not a is otherwise required to file a return this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely w edward williams senior technical reviewer office of the associate chief_counsel international


department of the treasury internal_revenue_service washington d c uniform issue no date oct contact person id number telephone number employer_identification_number legend l m n a b d e f g dear sir madam this letter is in response to your request_for_ruling under sec_501 of the internal_revenue_code facts you are a non-profit corporation incorporated on date under the laws of the state of a your sole member is l a sec_501 organization your articles of incorporation provide that you are to be operated exclusively for charitable scientific and educational_purposes you operate an acute care hospital in b county a rural_area of the state you offer medical services to all persons in c county and the surrounding areas of a you have been recognized as an organization described in sec_501 of the code and as not a private_foundation because you are described in sec_509 and sec_170 your board_of directors is comprised of persons who are independent members of the community according to data from the a economic development office the city of b and c county are considered to be economically distressed areas you operate the hospital in a building that was constructed in the old building with the passage of time the old building has required several structural modifications and additions in order to provide additional space for patient care and to meet revised health licensure requirements mandated by the state of a for facilities providing health care currently the old building complies with the health a licensure and survey requirements established by the a department of health and human resources office of health facility licensure and certifications although grandfathering variances have permitted the old building to meet these requirements the old building however would require several major repairs in the near future in order for it to continue to operate as a hospital facility and to meet the minimum health licensure and survey requirements consequently in your board_of directors determined that the cost of continuing to upgrade and maintain the old building would far outweigh the cost of constructing a new hospital building the new building’ as a result your board approved construction of the new_building you expect that construction of the new_building will be completed by date and you plan to move your hospital operations to the new_building as soon as possible after its completion with respect to the old building your board_of directors considered several alternatives given the population of c county a and the city of b and the current economic status of those areas your board_of directors determined that it would most likely be unable to sell the old building and therefore did not list the property for sale with any commercial real_estate broker in reaching this conclusion your board relied on advice from d a state certified real_estate appraiser the appraiser’ input from the m board_of trade advice from your management and on data from the a economic development office -and the a bureau of employment programs you had enlisted the assistance of the board_of trade because it was more familiar with economic development that you were a second alternative your board considered was donating the facility to n the college for various reasons the college would not accept this donation your board also considered demolishing the old building you estimated that this would cost between e including about f for the removal of asbestos as a final alternative a private business o offered to purchase the old building o is a non- exempt limited_liability_company owned by members_of_a_family none of the owners of o has any relation whether business or familial to you or to the board_of trade or has any interest in the new_building o's main activity is renovating abandoned or outmoded public buildings for lease o has substantial experience in renovating old buildings and in bringing new business into these facilities the purchase_price o will pay for the old building has not yet been finalized but in no event will it exceed g however o will pay for the cost of the asbestos removal under the proposed transaction which your board has approved you would convey the old building to the board_of trade and the board_of trade would immediately convey it to oatno cost since the board_of trade participated in this transaction from the start it desired to be a party to the transaction oq would then renovate the old building and lease office space in the renovated facility to various businesses both you and the board_of trade determined that the transfer of the old building to q would substantially benefit the county and b areas by generating new business in the area o estimates that leasing office space in the renovated facility would create between to new jobs in the c county area paying an average of approximately dollar_figure to dollar_figure per year the appraiser has no direct or indirect financial interest in your organization the board_of trade o or in the new_building in addition none of the members of your board has any direct or indirect financial interest in your organization the board_of trade o or in the new_building the conflicts of interest policy included in section of your bylaws applies to the proposed transaction the proposed transaction will not adversely affect the tax-exempt status of your organization under sec_501 of the code ruling requested applicable law sec_501 a of the code provides an exemption from federal_income_tax for organizations described in sec_501 including organizations that are organized and operated exclusively for charitable educational or scientific purposes sec_501 of the code provides for the exemption from federal_income_tax of organizations organized and operated exclusively for charitable scientific or educational_purposes provided no part of the organization's net_earnings inures to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 of the income_tax regulations provides that for an organization to be exempt as one described in sec_501 of the code it must be both organized and operated exclusively for one or more exempt purposes under sec_1_501_c_3_-1 of the regulations an exempt_purpose includes a charitable purpose sec_1_501_c_3_-1 of the regulations provides that an organization is organized exclusively for one or more exempt purposes only if its articles of organization a limit the purposes of such organization to one or more exempt purposes and b do not expressly empower the organization to engage otherwise than as an insubstantial part of its activities in activities which in themselves are not in furtherance of one or more exempt purposes sec_1_501_c_3_-1 of the regulations provides that an organization is operated exclusively for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of such exempt purposes specified in sec_501 of the code an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose sec_1_501_c_3_-1 of the regulations defines the term charitable as including the promotion of social welfare by organizations designed to provide relief of the poor and distressed and to combat community deterioration revrul_76_585 1970_2_cb_115 held that nonprofit housing organizations created to aid low and moderate income families by lessening neighborhood tensions eliminating prejudice and discrimination and combating community deterioration qualifies for exemption under sec_501 of the code revrul_74_587 1974_2_cb_162 held that a nonprofit organization formed to relieve poverty eliminate prejudice reduce neighborhood tensions and combat community deterioration through a program of financial assistance in the form of low-cost or long-term loans to or the purchase of equity interests in various business enterprises in economically depressed areas is exempt under sec_501 of the code revrul_76_419 1976_2_cb_146 held that a nonprofit organization that purchases blighted land in an economically depressed community converts the land into an industrial park and encourages industrial enterprises to locate new facilities in the park in order to provide employment opportunities for low income residents of the area is operated exclusively for charitable purposes and qualifies for exemption under sec_501 of the code revrul_77_114 1977_1_cb_144 held that an organization formed to increase business patronage in a deteriorated area by providing information on the area's shopping opportunities local transportation and accommodations is not operated exclusively for charitable purposes and does not qualify for exemption under sec_501 of the code similarly an organization whose purpose is to revive retail sales in an area of economic decline by constructing a shopping center does not qualify for exemption rationale you are organized to operate exclusively for charitable scientific and educational_purposes in furtherance of these purposes you operate an acute care hospital in a facility referred to as the oid building which is located in an economically distressed area of a in furtherance of these purposes you determined that it was necessary to relocate the hospital to a new facility the new building’ you also determined that due to the prevailing economic conditions in your community your only economically viable alternative was to transfer the old building through your local board_of trade for no more than gto o an unrelated independent non-exempt limited_liability_company o’s main activity is renovating abandoned or outmoded public buildings for lease o has substantial experience in renovating oid buildings and in bringing new business into these facilities under your arrangement with o o would assume the cost of removing asbestos from the old building in addition o would renovate the old building and lease space in the renovated structure to businesses o has estimated that leasing office space in the renovated facility would create between to new jobs in the c county area paying an average of approximately dollar_figure to dollar_figure per year by transferring the old building at no cost to an unrelated independent company that will renovate the facility and create new jobs in your economically distressed_community you are furthering charitable purposes under revrul_70_585 supra rev_rul rul supra and revrul_76_419 supra any economic benefits derived by o from this transaction and by the businesses that will lease space in the renovated facility would be merely incidental in relation to the charitable purposes that are being promoted therefore as a result of your transaction with q you will continue to operate exclusively for charitable purposes unlike the organizations described in revrul_77_11 supra ruling the proposed transaction will not adversely affect the tax-exempt status of your organization under sec_501 of the code this ruling is based on the understanding that there will be no material changes in the facts upon which it is based this ruling does not address the applicability of any section of the code or regulations to the facts submitted other than with respect to the sections described this ruling is directed only to the organization that requested it and may not be used or cited by others as precedent e we are informing your area manager of this action please keep a copy of this ruling in your permanent records f you have any questions about this tuling please contact the person whose name and telephone number are shown in the heading of this letter in accordance with the power_of_attorney currently on file with the internal_revenue_service we are sending a copy of this letter to your authorized representative sincerely signed marvin friedlander marvin friedlander manager exempt_organizations technical group


id office uilc cca_2009021809114937 -------------- number release date from ------------------- sent wednesday date am to -------------------- cc ----------- subject re d --------case there is no section a statute from a key case source partnership if the source partnership did not file a sec_6227 request_for_administrative_adjustment we should probably use the tier partner's section b b ii statute for issuing any refunds assuming that the tier entity's form_8082 is treated as an aar under sec_6227 rather than an aar under sec_6227 the statutory two year period would be the same under section a if it is treated instead as a claim under sec_6227 so for purposes of computing the time for issuing refunds it doesn't matter how the tier partner's claim is ultimately characterized arguably the form 1040x filed by an indirect_partner holding an interest in the source partnership through the tier partner would if timely filed under sec_6227 and if it otherwise constituted a valid aar would provide a longer statute for issuing a refund to that particular partner under section b b ii the courts are split on whether a form 1040x by itself constitutes a valid aar


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 b1 plr-150283-07 date date legend x -------------------------------------------------- -------------------------------------------------------------------- country date --------------------- -------------------- dear -------------- this is in response to a letter dated date requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to file an election to treat x as a partnership for federal tax purposes under sec_301_7701-3 facts according to the information submitted x is an entity organized under the laws of country x was eligible to make an election to be treated as a partnership for federal tax purposes effective date however due to inadvertence form_8832 entity classification election was not timely filed law and analysis sec_301_7701-3 provides guidance on the classification of a foreign eligible_entity for federal tax purposes generally unless the entity makes an election to be treated otherwise a foreign eligible_entity is treated as an association taxable as a plr-150283-07 corporation if all members have limited_liability if a foreign eligible_entity has only one owner it may elect to be treated as a disregarded_entity pursuant to the rules in sec_301_7701-3 if a foreign eligible_entity has more than one owner it may elect to be treated as a partnership pursuant to the rules in sec_301_7701-3 sec_301_7701-3 further provides that an entity classification election must be filed on form_8832 entity classification election and can be effective up to days prior to the date the form is filed or up to months after the date on which the form is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election with a deadline prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 conclusion based solely upon the information submitted we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result an extension of days from the date of this letter is granted to elect to treat x as a partnership for federal tax purposes effective date the entity classification election should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose 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 plr-150283-07 this ruling is directed only to the taxpayer s requesting it sec_6110 of the internal_revenue_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 will be sent to your authorized representative sincerely william p o’shea william p o’shea 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 corp b01 plr-106674-12 date april legend legend parent date date date x ---------------------------------------------- -------------------------------------- --------------------------- --------------------------- ------------------- -- company official ------------------------ ------------------------------------------- tax professional ---------------------- ------------------------------------------------------ ---------------------------------------------------------------------------------------------------------------- dear ------------------- this letter responds to a letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election in particular parent is requesting an extension of time for the consolidated_group of which parent is the common parent to elect an extended carryback period the election for a consolidated_net_operating_loss cnol the material information submitted for consideration is summarized below parent is the common parent of a consolidated_group the parent group parent group incurred a cnol in the taxable_year ending date the year cnol plr-106674-12 parent seeks to carry back the year cnol x years to its taxable_year ending date under sec_172 parent was required to file the election in order to carry back the year cnol to its taxable_year ending date and to obtain the benefit of sec_56 the election was due on date but for various reasons a valid election was not filed after the due_date for the election it was discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election the period of limitations on assessment under sec_6501 has not expired for the parent group’s consolidated_income_tax_return for the taxable_year ending date or any subsequent taxable_year parent has represented that it is not seeking to alter a return position for which an accuracy-related_penalty has been or could have been imposed under sec_6662 sec_172 of the internal_revenue_code generally permits a taxpayer to carry back a net_operating_loss to each of the taxable years preceding the taxable_year of the nol sec_172 of the internal_revenue_code permits a taxpayer to elect to carry back an applicable net_operating_loss to each of the or taxable years preceding the taxable_year of the applicable nol in lieu of the 2-year period provided by sec_172 sec_172 provides that the term applicable net_operating_loss applicable nol means the taxpayer’s net_operating_loss for a taxable_year ending after date and beginning before date sec_172 provides that the election under sec_172 shall be made by the due_date including extension of time for filing the return for the taxpayer’s last taxable_year beginning in the election is irrevocable and in general may be made only with respect to one taxable_year sec_1502 provides that the secretary shall prescribe such regulations as he may deem necessary in order that the tax_liability of any affiliated_group_of_corporations making a consolidated_return and of each corporation in the group both during and after the period of affiliation may be returned determined computed assessed collected and adjusted in such manner as clearly to reflect the income_tax_liability and the various factors necessary for the determination of such liability and in order to prevent avoidance of such tax_liability in carrying out the preceding sentence the secretary may prescribe rules that are different from the provisions of chapter that would apply if such corporations filed separate returns sec_1_1502-21 provides that losses taken into account in determining a cnol may be carried to other taxable years whether consolidated or separate only under paragraph b of sec_1_1502-21 plr-106674-12 sec_1_1502-21 provides loss_carryovers_and_carrybacks to a taxable_year are determined under the principles of sec_172 and sec_1 that net operating sec_1_1502-21t provides that a consolidated_group can elect an extended carryback period pursuant to sec_172 with regard to a cnol arising in a taxable_year ending after date and beginning before date taxpayers by attaching a statement revproc_2009_52 2009_49_irb_744 provides when and how a taxpayer may make an election under sec_172 sec_4 of revproc_2009_52 provides that the common parent of a consolidated_group makes the election for the group sec_4 and of revproc_2009_52 permit the election to be made for consolidated the original or amended consolidated_return for the taxable_year of the applicable cnol by attaching a statement to the taxpayer’s amended consolidated_return applying the applicable cnol to the carryback_year or by attaching a statement to a claim for a tentative_carryback_adjustment on form_1139 sec_4 b and b of revproc_2009_52 require the election regardless of the manner in which made to be filed no later than the due_date including extensions for filing the return for the taxpayer’s last taxable_year beginning in to under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 requests 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 standards the the election by a consolidated_group to extend the carryback period under sec_172 for a cnol is a regulatory election therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent to file the election provided parent establishes to the satisfaction of the commissioner that it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on plr-106674-12 a qualified_tax professional who failed to make or advise parent to make a valid election see sec_301_9100-3 based on the facts and information submitted including the affidavits submitted and the representations made we conclude that parent has shown it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly provided the parent group qualifies substantively to file the election we grant an extension of time under sec_301_9100-3 until sixty days from the date on this letter for parent to file the election the time in which parent may file a form_1139 for the year cnol has expired however parent may file the election under sec_172 to carry back the year cnol to its taxable_year ending date on form 1120x amended u s_corporation income_tax return for the taxable_year ending date according to the procedures set forth in revproc_2009_52 a copy of this letter must be attached to the form 1120x if parent files form 1120x electronically parent may satisfy the requirement of attaching a copy of this letter by attaching a statement to the parent group’s amended_return that provides the date and control number plr-106674-12 of this letter_ruling the above extension of time is conditioned on the parent group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money we express no opinion as to the parent group’s tax_liability for the years involved a determination thereof will be made by the director’s office upon audit of the income_tax returns involved except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion with respect to whether parent qualifies substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the internal_revenue_code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in this letter for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalties of perjury by parent company official and tax professional the director however should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election any penalties and interest that otherwise would be applicable continue to apply plr-106674-12 this letter_ruling is directed only to the taxpayer who requested sec_6110 provides that it may not be used or cited as precedent it pursuant to the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely __________________ ken cohen senior technician reviewer branch office of associate chief_counsel corporate cc