internal_revenue_service number release date index number ------------------------------- ----------------------------------------- -------------------------- -------------------------------- in re ----------------------------------------- department of the treasury washington dc third party communication date of communication month dd yyyy person to contact ---------------------------- id no ---------- telephone number --------------------- refer reply to cc p si plr-152816-08 date date legend taxpayer ----------------------------------------------------------------------------- ----------------------------------------- state a coop -------- --------------------- dear ------------------ this is in response to a request for rulings submitted by your authorized representatives concerning the federal_income_tax consequences of a transaction involving a subchapter_t cooperative as described below taxpayer is the surviving entity resulting from the merger of two entities taxpayer is a state a corporation organized and operating under the state a business corporation act and the state a co-operative act taxpayer is managed by a board_of directors consisting of --------- individuals taxpayer operates under several divisions which are designated based on the scope plr-152816-08 activities product coverage operational and geographical coverage and which are more specifically set forth in the plan of operations currently taxpayer has two types of members shareholder members and associate members collectively the members the right and obligations of the members are set forth in the by-laws all members must own a ----------- business that is operated in compliance with taxpayer’s by-laws and plan of operations pursuant to an accepted application_for membership taxpayer has two classes of stock class a shares and class b shares collectively the shares no person is permitted to own more than one class a share a shareholder member is a member of taxpayer that owns one share of the class a shares associate members have all of the rights privileges duties and obligations of shareholder members except the ownership of class a shares and the rights attendant thereto each outstanding class a share and each outstanding class b share is entitled to vote on acts of taxpayer the voting power of the class a shares changes annually based on the annual purchases of products by the shareholder member each class b share is entitled to one vote only upon certain matters requiring a vote by the shareholders under applicable law or pursuant to the articles of incorporation taxpayer created the class b shares in --------and allocated the initial class b shares to the then members based on their patronage over the proceeding ----year period taxpayer issued additional class b shares from time to time which it has allocated to the members based on their patronage over the applicable time period upon termination of membership for any reason a holder’s class a share is automatically redeemed for its par_value of dollar_figure----- and any class b shares repurchased by taxpayer in accordance with the terms and conditions provided in the plan of operations which generally provides that the shares are redeemed at book_value taxpayer’s articles of incorporation prohibit taxpayer from paying dividends with respect to any of its shares specifically article four of the articles of incorporation as amended provides that n o dividends shall be declared or paid with respect to any shares of the corporation the articles of incorporation further provide that taxpayer shall distribute its rebateable net_income to qualified participants in the form of patronage rebates as provided in its by-laws and that upon dissolution of taxpayer each class a share shall receive a distribution equal to its par_value of dollar_figure----- per share and thereafter the class b shares shall receive a distribution equal to a pro_rata portion of the net assets of the corporation remaining after the claims of all creditors have been satisfied and payment of patronage distributions have been made or provided for article ix of taxpayer’s by-laws provide that taxpayer shall rebate to its qualified participants at least annually all of the corporation’s rebateable net_income in excess of such reasonable retentions for reserves payments of debts capital improvements or additions and working_capital requirements as the board_of directors may determine for this purpose net gains resulting from the sale_or_exchange of plr-152816-08 tangible or intangible assets used in taxpayer’s business are not included in taxpayer’s rebateable net_income historically taxpayer distributed substantially_all of its net_earnings as patronage rebates to its members if taxpayer’s operations for any division result in a loss the by-laws permit the board_of directors to levy a deficit charge against qualified participants or to net the loss against patronage rebates otherwise payable to the qualified_participant there is no provision which permits an assessment of losses to a former member article ix of taxpayer’s by-laws define a qualified_participant as a member who is or was participating in a division of taxpayer on or prior to the designated date on which qualification for receipt of patronage rebates the qualified date is determined by the board_of directors the by-laws further provide that a former member shall not be a qualified_participant of any division if the member has been expelled for cause or if the member’s membership has terminated prior to the qualification date by voluntary resignation or termination not in compliance with the requirements of the by-laws or plan of operations or not incidental to a bona_fide sale liquidation termination or insolvency of his or her business thus a former member that would otherwise be entitled to a patronage rebate will not receive one if the member is expelled or terminates membership in a manner that triggers this provision of the by-laws despite having participated in a division of the taxpayer prior to termination members that terminate membership in a manner that is not in violation of this provision of the by-laws will be paid their share of patronage rebates with respect to their patronage prior to the termination_date and any of their class b shares will be redeemed by taxpayer in accordance with the above-described terms but the members will have no right to receive any additional patronage rebates or other_payments subsequent to that date article ix of the by-laws provides that patronage rebates are payable wholly in cash or payable in a combination of cash property rebate notes class b shares or other form of written_notice_of_allocation within the meaning of sec_1388 b of the code provided however that at least of patronage rebates for each year must be paid in cash and provided further that the percentage payable in rebate notes and class b shares or other form in written_notice_of_allocation shall be uniformly applied to all members the rebate notes bear interest at a rate equal to the interest rate that is designated by the board_of directors as the applicable_rate under the plan of operations for purposes of voluntary loans made by members and are payable in five equal annual installments beginning on --------------------of the first fiscal_year following the fiscal_year in which the rebate note is issued and on --------------------of each of the four succeeding fiscal years thereafter the by-laws further provide that each member consents that the amount of any patronage rebate payable in the form of a rebate note class b shares or other written_notice_of_allocation shall be included in the gross_income of the member at its stated dollar amount in the taxable_year in which the rebate note class b share or other written_notice_of_allocation is received by the member plr-152816-08 each member agrees to purchase from taxpayer not less than a minimum dollar amount of merchandise each week as specified in the member’s application_for membership in furtherance of this requirement members are required pursuant to the plan of operations to maintain a security deposit with taxpayer in the form of a standby_letter_of_credit or cash deposit a member that has terminated membership for any reason is generally entitled to a return of the security deposit within days following the termination in the event of any liquidation dissolution or other winding up of taxpayer no portion of the security deposits rebate notes or other_amounts specified in the plan of operations as being owed to members shall be returned or paid to the member unless and until all principal and interest on all other liabilities debts and indebtedness of taxpayer shall be been paid and satisfied in full taxpayer is organized and operated as a cooperative that serves member retail - ----------- located in the ------------ taxpayer was originally formed as a buying cooperative and aims to provide the independent retailer with product prices and services to keep the retailer competitive with the major chains in addition to its buying activities taxpayer provides advertising support store building programs training programs and various other support services to its members taxpayer’s inventories consist principally of purchased goods held for resale to members including ------------- - --------------------------------------------------------------------------------------------------------- ----- and general merchandise taxpayer owned and operated a warehouse located in -------------------------which had been used by the taxpayer as its primary warehouse and distribution center since - ------------- taxpayer’s business office was in a separate building on the property adjacent to the warehouse which was separately built at a later date on ------------------ ----- taxpayer entered into a contract to sell all of its buildings and related land collectively the property to an unrelated investment group the purchaser the sale of the property was effectuated on ---------------------------- the effective date for a purchase_price of approximately dollar_figure-------million the taxpayer subsequently leased back from the purchaser the office building and a portion of the warehouse for a term of months for annual rent of dollar_figure-------------- the lease taxpayer had an adjusted tax basis in the property of approximately dollar_figure-----------------on the effective date resulting in gain before related selling expense of approximately dollar_figure---------------on the sale gain taxpayer proposes to distribute the net_proceeds from the sale of the property the proceeds to its members as a patronage_dividend with at least of the dividends to be paid in cash with the remainder to be paid in the form of qualified written notices of allocation taxpayer’s board_of directors approved the sale of the property as part of an overall strategic plan to improve efficiencies in the operation of the business and to allow for more flexibility in connection with options regarding the future operation of the business specifically taxpayer’s board_of directors believed that the property was too large and too expensive to support in light of taxpayer’s current business activities in plr-152816-08 addition taxpayer and its members were considering certain options including ceasing operations or merging operations with another ----------- cooperative at this time taxpayer intends to wind down operations following expiration of the lease taxpayer has entered into a transition agreement with a separate ------------cooperative coop to purchase certain of taxpayer’s inventory and assets and most members have signed agreements to become members of coop upon the eventual winding down of taxpayer’s operations taxpayer proposes to distribute proceeds to its current members in good standing as of the end of taxpayer’s fiscal_year in which the effective date of the sale occurred ie ------------------------ the allocation date based on the members’ patronage over taxpayer’s approximate ----year holding_period of the property the holding_period members who withdrew from the cooperative prior to the allocation date will not receive any distribution of proceeds related to the property even if the member had patronage activities during the holding_period taxpayer believes that its proposed allocation method is appropriate because i taxpayer has computerized records that accurately track membership and patronage for the last---------fiscal years and can compile paper records and verify that the paper records accurately track membership and patronage with respect to current members for the preceding fiscal years during the holding_period ii taxpayer’s membership has been relatively stable over the holding_period iii the majority of the current members have been members for many years prior to the allocation date including many who have been members throughout the holding_period iv the current members that would be entitled to the largest allocations have been members for many years prior to the allocation date including many who have been members throughout the holding_period v a number of patrons have withdrawn from the cooperative throughout the holding_period and the administrative burden of tracking down such former members would be material vi inclusion of former members would significantly increase the amount of proceeds that would be unclaimed inasmuch as many former members are no longer in business vii under taxpayer’s organizational documents former member no longer have a current financial interest in taxpayer and viii taxpayer expects to cease operations and it would be inequitable to permit long departed members that will not be required to bear any costs associated with winding down the business to share in proceeds in support of its position taxpayer represents the following taxpayer has computerized records that accurately track membership and patronage for the fiscal years --------through ------- for years prior to ------- taxpayer maintained paper records taxpayer can compile those paper records with respect to its current members and can verify with those current members that the paper records accurately track the member’s membership and patronage for the applicable years that the current member was a member during the holding_period with respect to former members many of plr-152816-08 whom no longer exist and would be difficult if not impossible to identify and locate taxpayer would be unable to verify the accuracy of the paper records taxpayer’s membership over the holding_period has been relatively stable most current members have been patrons of taxpayer for many years prior to the allocation date taxpayer can identify its members as of the allocation date and can track and verify their patronage throughout the holding_period taxpayer’s records show that the stores operated by current members that would be entitled to a distribution under taxpayer’s proposed method account for approximately ------ of the total sales volume during the ------- year period for which it has maintained computerized records and that the average annual sales volume for the members throughout the entire holding_period do not differ significantly taxpayer’s records show that inclusion of former members that left the cooperative prior to the allocation date would have a small effect on how proceeds would be distributed both because the dollar volume of patronage_dividends has generally been larger in more recent years and because the current members that would be entitled to the largest distributions have been patrons of taxpayer for many years prior to and including the allocation date as stated in representation current members account for approximately ------ of taxpayer’s total sales volume over the most recent fiscal years analysis of taxpayer’s records shows a number of patrons have withdrawn from the cooperative during the holding_period many of those former members no longer exist and would be difficult if not impossible to identify and locate them once a ----------ceases to buy goods and use the services provided by taxpayer membership is terminated the class a share is automatically redeemed and the class b shares are repurchased by taxpayer pursuant to the terms of the plan of operations as described above the by-laws provide that a former member is no longer a qualified_participant and is not entitled to any patronage rebates attributable to the time period after termination and can no longer be assessed for any losses taxpayer may incur in addition a former member that is expelled voluntarily terminates its interest or terminates in such a manner that is not in accordance with the by-laws or the plan of operations is not entitled to any patronage rebates even with respect to the time period prior to termination a former member’s only interest in the cooperative is represented by any rebate notes held by the member which will be retired after the 5-year period described above none of which are outstanding thus members whose membership has terminated have no plr-152816-08 further financial interest or property rights in taxpayer subsequent to the termination taxpayer sold the property as part of an overall strategic plan to improve efficiencies in the operation of the business and to allow for more flexibility in connection with options regarding the future operation of the business taxpayer intends to crease operations following expiration of the lease the termination pursuant to which taxpayer will sell other assets and inventory and its members will join other cooperatives also as part of the termination taxpayer will incur significant expenses including a required funding of taxpayer’s under funded pension liability because taxpayer’s organizational documents provide that a former member can no longer be assessed for any losses taxpayer’s termination expenses will be borne entirely by its current members taxpayer further represents that it’s bylaws and articles as well as state a law require it to distribute the gain related to the sale of taxpayer’s property to taxpayer’s patrons based on the foregoing taxpayer requests the following rulings the gain form the sale of the property represents patronage source income the code and sec_1_1382-2 of the regulations the method of distributing the proceeds in the form of patronage_dividends resulting from the gain in accordance with the above-described procedures is practicable and a reasonable method of distributing the proceeds to the persons who were patrons during the taxable years in which the property was owned and the amounts paid_by taxpayer to its members will be deductible as patronage_dividends under sec_1382 of the code and sec_1_1382-2 of the regulations sec_1388 of the code specifies that a patronage_dividend must be determined by reference to the net_earnings of the organization from business done with or for its patrons that section further provides that the term patronage_dividend does not include any amount_paid to a patron to the extent that such amount is out earnings other than from business done with or for patrons further it does not include earnings from business done with or for other customers to whom no amounts are paid or to whom smaller amounts are paid with respect to substantially identical transactions in revrul_69_576 1969_2_cb_166 a nonexempt farmers’ cooperative borrowed money from a bank for cooperatives itself a cooperative to finance the acquisition of agricultural supplies for resale to its members the bank for cooperatives plr-152816-08 allocated and paid interest from its net_earnings to the nonexempt farmers’ cooperative which it in turn allocated to its members in determining whether the allocation was from patronage sources the ruling states the classification of an item_of_income as from either patronage or nonpatronage sources is dependent on the relationship of the activity generating the income to the marketing purchasing or service activities of the cooperative if the income is produced by a transaction which actually facilitates the accomplishment of the cooperative's marketing purchasing or service activities the income is from patronage sources however if the transaction producing the income does not actually facilitate the accomplishment of these activities but merely enhances the overall profitability of the cooperative being merely incidental to the association's cooperative operation the income is from nonpatronage sources revrul_69_576 pincite the ruling concluded that in as much as the income received by the nonexempt_cooperative from the bank for cooperatives resulted from a transaction that financed the acquisition of agricultural supplies which were sold to its members thereby directly facilitating the accomplishment of the cooperative’s marketing purchasing or service activities the income was patronage sourced sec_1_1382-3 of the income_tax regulations defines income from sources other than patronage nonpatronage income to mean incidental income derived from sources not directly related to the marketing purchasing or service activities of the cooperative association such as income derived from lease of premises from investment in securities or from the sale_or_exchange of capital assets in st louis bank for cooperatives v united 624_f2d_1041 cl_ct the court held that interest on demand deposits in farm credit banks or on loans to brokerage funds received by st louis bank for cooperatives was patronage sourced income the court stated that a particular item_of_income is patronage sourced when the transactions involved are directly related to the marketing purchasing or service activities of the cooperative association f 2d pincite in twin county grocers inc v united_states cl_ct a nonexempt_cooperative was denied deductions for patronage_dividends for interest on a certificate of deposit bought from a nonpatron bank because the dividend income was not patronage sourced the court held that the relation of income activity to the cooperative’s business was too tenuous courts have ruled in several instances that income from corporations organized by cooperatives to conduct activities related to the cooperative business is patronage plr-152816-08 sourced in farmland industries v commissioner 78_tcm_846 acq aod citing 765_f2d_1102 675_f2d_988 8th cir 88_tc_238 87_tc_435 the taxpayer a cooperative organized for the purpose of providing petroleum products to its patrons sought to have the proceeds from the disposition of its stock in three subsidiaries classified as patronage-sourced income in reaching its decision the court stated that its task was to determine whether each of the gains and losses at issue was realized in a transaction that was directly related to the cooperative enterprise or in one which generated incidental income that contributed to the overall profitability of the cooperative but did not actually facilitate the accomplishment of the cooperative s marketing purchasing or servicing activities on behalf of its patrons t c m pincite in land o’lakes inc supra the court held that dividends received by the nonexempt_cooperative from the st paul bank for cooperatives was patronage derived and could be allocated to land o’lakes patrons as deductible patronage_dividends the court noted that the taxpayer was required to acquire and hold the stock to obtain a loan the proceeds of which were used to finance cooperative activities on favorable terms finding that the subject transaction was not significantly distinguishable from the transaction in revrul_69_576 sec_1_1382-3 of the regulations provides in relevant part that it is necessary that the amount sought to be deducted be paid on a patronage basis in proportion insofar as is practicable to the amount of business done by or for patrons during the period to which such income is attributable for example if capital_gains are realized from the sale_or_exchange of capital assets acquired and disposed of during a single taxable_year income realized from such gains must be paid to patrons of such year in proportion to the amount of business done by such patrons during the taxable_year similarly if capital_gains are realized by the association from the sale_or_exchange of capital assets held for a period extending into more than one taxable_year income realized from such gains must be paid insofar as is practicable to persons who were patrons during the taxable years in which the asset was owned by the association in proportion to the amount of business done by such patrons during such taxable years in the instant case the property was used in the taxpayer’s business to warehouse and facilitate the efficient distribution of its products to its members taxpayer’s board_of directors approved the sale of the property as part of an overall strategic plan to improve efficiencies in the operation of the business and to allow for more flexibility in connection with options regarding the future operation of the business specifically taxpayer’s board_of directors believed that the property was too large and too expensive to support in light of taxpayer’s current business activities in addition taxpayer and its members were considering certain options including ceasing plr-152816-08 operations or merging operations with another ----------- cooperative hence the sale was also directly related to and facilitative of taxpayer’s cooperative purpose accordingly based solely on the foregoing we rule that the gain from the sale of the property represents patronage source income that may be eligible for a patronage_dividend exclusion under sec_1382 of the code and sec_1_1382-2 of the regulations the method of distributing the proceeds in the form of patronage_dividends resulting from the gain in accordance with the above-described procedures is practicable and a reasonable method of distributing the proceeds to the persons who were patrons during the taxable years in which the property was owned and such amounts paid_by taxpayer to its members will be deductible as patronage_dividends under sec_1382 of the code and sec_1_1382-2 of the regulations this ruling is directed only to the taxpayer that requested it under sec_6110 k of the code it may not be used or cited as precedent in accordance with a power_of_attorney filed with the request a copy of the ruling is being sent to your authorized representatives sincerely yours nicole r cimino nicole r cimino senior technician reviewer branch office of the associate chief_counsel passthroughs special industries cc


internal_revenue_service number release date index number -------------------------------------- ------------------------------------- ---------------------------------------------- re -------------------------------------- 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 b04 plr-122445-16 date date legend decedent spouse date date --------------------------------------------------- ------------------------ -------------------------- --------------------------- dear ----------------- this letter responds to your personal representative’s letter of date requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election under sec_2010 of the internal_revenue_code portability election to allow a decedent’s surviving_spouse to take into account that decedent’s deceased spousal unused exclusion dsue amount the facts and representations are as follows decedent died on date survived by spouse date is a date after the effective date of the amendment to sec_2010 which provides for portability of a dsue amount to a surviving_spouse to obtain the benefit of portability of decedent’s dsue amount to spouse decedent’s estate was required to file form_706 united_states estate and generation-skipping_transfer_tax return on or before the date that is nine months after decedent’s date of death or the last day of the period covered by an extension decedent’s form_706 was due on date but the estate did not file a form_706 to make the portability election the estate discovered its failure to elect portability after the due_date for making the election it is represented that the value of decedent’s gross_estate is less than the basic exclusion amount in the year of decedent’s death including any taxable_gifts made during his lifetime plr-122445-16 you request an extension of time pursuant to sec_301_9100-3 to elect portability of decedent’s dsue amount pursuant to sec_2010 law and analysis sec_2001 imposes a tax on the transfer of the taxable_estate of every decedent who is a citizen or resident_of_the_united_states sec_2010 provides that a credit of the applicable credit_amount shall be allowed to the estate of every decedent against the tax imposed by sec_2001 sec_2010 provides that the applicable credit_amount is the amount of the tentative_tax that would be determined under sec_2001 if the amount with respect to which such tentative_tax is to be computed were equal to the applicable_exclusion_amount on date congress amended sec_2010 effective for estates of decedents dying and gifts made after date to allow portability of a decedent’s unused applicable_exclusion_amount between spouses tax relief unemployment insurance reauthorization and job creation act of pub_l_no sec_303 124_stat_3296 sec_2010 provides that the applicable_exclusion_amount is the sum of the basic exclusion amount and in the case of a surviving_spouse the dsue amount sec_2010 generally provides that the basic exclusion amount is dollar_figure to be adjusted for inflation annually after calendar_year sec_2010 defines the dsue amount to mean the lesser_of a the basic exclusion amount or b the excess of -- i the applicable_exclusion_amount of the last deceased spouse of the surviving_spouse over ii the amount with respect to which the tentative_tax is determined under sec_2001 on the estate of such deceased spouse sec_2010 provides that a dsue amount may not be taken into account by a surviving_spouse under sec_2010 unless the executor of the estate of the deceased spouse files an estate_tax_return on which such amount is computed and makes an election on such return that such amount may be so taken into account the election once made shall be irrevocable no election may be made if such return is filed after the time prescribed by law including extensions for filing such return sec_2010 provides that the secretary shall prescribe regulations as may be necessary or appropriate to implement sec_2010 plr-122445-16 sec_20_2010-2t a of the estate_tax regulations as in effect on date provides that to allow a decedent’s surviving_spouse to take into account that decedent’s dsue amount the executor of the decedent’s estate must elect portability of the dsue amount on a timely-filed form_706 under sec_20_2010-2t a the due_date of an estate_tax_return required to elect portability is nine months after the decedent’s date of death or the last day of the period covered by an extension if an extension of time for filing has been granted under sec_20_2010-2t a the portability election is made by timely filing a complete and properly prepared estate_tax_return unless the executor satisfies the requirements for the election not to apply in sec_20_2010-2t a i sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 provides that the term statutory election means an election whose due_date is prescribed by statute the term regulatory election means an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute a request for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer failed to make the election because after exercising reasonable diligence taking into account the taxpayer’s experience and the complexity of the return or issue the taxpayer was unaware of the necessity for the election the due_date for the portability election is prescribed by statute in the case of an estate required to file an estate_tax_return under sec_6018 see sec_2010 sec_6075 and sec_6018 in the case of an estate that is not required to file an estate_tax_return under sec_6018 the due_date is prescribed by regulation see sec_20_2010-2t a see also sec_20_2010-2 and revproc_2014_18 2014_7_irb_513 sec_2 accordingly in the latter case a taxpayer may seek an extension of time to elect portability under the provisions of sec_301_9100-3 plr-122445-16 sec_6018 requires the filing of an estate_tax_return in all cases where the gross_estate exceeds the basic exclusion amount in effect under sec_2010 for the calendar_year which includes the date of death for purposes of this determination under sec_6018 the basic exclusion amount is reduced but not below zero by the sum of -- a the amount of the adjusted_taxable_gifts within the meaning of sec_2001 made by the decedent after date plus b the aggregate amount allowed as a specific exemption under sec_2521 as in effect before its repeal by the tax reform act of with respect to gifts made by the decedent after date it is represented that based on the value of the gross_estate and taking into account any taxable_gifts decedent’s estate is not required to file an estate_tax_return under sec_6018 under these facts the commissioner has discretionary authority under sec_301_9100-3 to grant to decedent’s estate an extension of time to elect portability based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly we grant an extension of time of days from the date of this letter in which to elect portability under sec_2010 the election should be made by filing a complete and properly-prepared form_706 and a copy of this letter within days from the date of this letter to the cincinnati service_center at the following address internal_revenue_service cincinnati service_center stop cincinnati oh for purposes of electing portability a form_706 filed by decedent’s estate within days from the date of this letter will be considered to be timely filed the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination if it is later determined that based on the value of the gross_estate and taking into account any taxable_gifts decedent’s estate is required to file an estate_tax_return pursuant to sec_6018 the commissioner is without authority under sec_301_9100-3 to grant to decedent’s estate an extension of time to elect portability and the grant of the extension referred to in this letter is deemed null and void this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent plr-122445-16 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely associate chief_counsel passthroughs special industries by lorraine e gardner lorraine e gardner senior counsel branch office of associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes