Download 0906032.pdf

Contents : Internal Revenue Service Department of the Treasury Number: 200906032 Release Date: 2/6/2009 Third Party Communication: None Date of Communication: Not Applicable Index Number: 355.01-01 368.04-00 1374.00-00 1374.00-01 Person To Contact: --------------------------------------------------------------------------------------------------------------------- Washington DC 20224 ------------------------ ID No. -----------Telephone Number: --------------------Refer Reply To: CC:CORP:B05 PLR-134538-08 Date: October 29 2008 In Re: ------------ LEGEND: Distributing ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Shareholder A Shareholder B Shareholder C Controlled ---------------- Sub1 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Manage Co ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- State X -------- Date 1 ------------------ ---------------- ------------ -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- PLR-134538-08 2 Date 2 -------------------------- Date 3 ------- Date 4 ---------------- Date 5 ------------------ Business ------------------------------ Location1 ----------------------- Location2 ------------------------------------------------------------ a% -------- b% -------- c% -------- d% -------- x --------------------------------------------------------------------- y ------------------------------------------------------------------------------ Dear ----------: This letter responds to your July 23 2008 request for rulings regarding certain federal income tax consequences of a proposed transaction. The information submitted in that request and in later correspondence dated October 10 2008 is summarized below. Unless otherwise indicated references herein to code sections and regulations sections are to the applicable Internal Revenue Code and Income Tax Regulations. The rulings contained in this letter are based on facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. This office has not verified any of the material 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. PLR-134538-08 3 In particular this office has not reviewed any information pertaining to and has made no determination regarding whether the distribution (described below): (i) satisfies the business purpose requirement of 1.355-2(b) (ii) is being used principally as a device for the distribution of the earnings and profits of Distributing or Controlled or both (see 355(a)(1)(B) and 1.355-2(d)) 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 Distributing or Controlled (see 355(e) and 1.355-7). Facts Distributing was incorporated as a State X corporation on Date 1. Distributing has a single class of voting common stock owned by three individual shareholders. Shareholder A and Shareholder C each own a% and Shareholder B owns b% of Distributing s stock. On Date 2 (more than ten years ago) the shareholders elected to treat Distributing as an S corporation. Distributing has directly conducted its Business for more than five years in two locations Location 1 and Location 2. On Date 3 (more than five years ago) Distributing purchased one hundred percent of the stock of Sub1 which expanded Distributing s Location 2 Business. On Date 4 Distributing made an ineffective election to treat Sub1 as an S corporation. On Date 5 Distributing s election to treat Sub1 as a qualified subchapter S subsidiary became effective. Distributing is an accrual method taxpayer filing its returns on a calendar year. Controlled will be formed by Distributing as a State X corporation in the transactions proposed below. Controlled will be an accrual method taxpayer filing its returns on a calendar year. Prior to the transactions proposed below Distributing plans to sell x Business assets in Location 1. Prior to or after the transactions proposed below Distributing

INFO HASH : 587d8ff3f41fddf2b757d73d574d0e17821f9ce2

Download now

File Size: 67.3 kb