IRS written determination 201516014

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 201516014
Release Date: 4/17/2015
Index Number: 355.01-00, 361.00-00
---------------------------
---------------------------
-----------------------------------------
-----------------------
-------------------------------
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
-----------------, ID No. ----------------
Telephone Number:
--------------------
Refer Reply To:
CC:CORP:1
PLR-123957-14
Date:
December 05, 2014
LEGEND
Distributing 4=--------------------------------------------
----------------------------------------------------------------------------
--------------------------------------------------------------------
Controlled 2=------------------------------
---------------------------------------
----------------------------------------------------------------------------
--------------------------------------------------------------------
Business A=------------------------------
$aa=-----------------------------------------------------------------------
-----------------------------------------------------------------
--------------------------------------------------------
----------------
Additional Payment=----------------------------------------------------------------------
----------------------------------------------------------------------
-------------------------------------------------------------------
-----------------------------------------------------------------
---------------------------------------------------
Board Resolution=----------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
---------------------------------
aaa=-----
Date 5=------------------

PLR-123957-14
2
Date 6=----------------
Dear --------------------:
This letter responds to your letter dated June 17, 2014, requesting that we
supplement our letter ruling dated June 4, 2014 (PLR-137376-13) (the “Prior Letter
Ruling”). The information submitted for consideration is summarized below. Capitalized
terms not defined in thisletter have the meanings assigned to them in the Prior Letter
Ruling.
This letter is issued pursuant to section 6.03 of Rev. Proc. 2014-1, 2014-1 I.R.B.
15, regarding one or more significant issues under sections 332, 351, 355, 368, or
1036. The rulings contained in this letter only address one or more discrete legal
issues involved in the transaction.This Office expresses no opinion in this letter as
to the overall tax consequences of the transactions described in this letter or as to
any issue not specifically addressed by the rulings below.
The rulings contained in this letter are based upon the information and
representations submitted by the taxpayer and accompanied by penalty of perjury
statements executed by an 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.
The Prior Letter Ruling addresses certain federal income tax consequences of
the Proposed Transactions under sections 355, 368 and certain other relevant
provisions of the Internal Revenue Code. Except as modified below, the representations
and material facts set forth in the Prior Letter Ruling remain in effect for purposes of this
supplemental letter ruling.
SUPPLEMENTAL FACTS
The Controlled 2 Contribution and the External Distribution were completed on
Date 6. On Date 5, Distributing 4’s Board of Directors adopted the Board Resolution.
The Board Resolution authorized Distributing 4 to implement the External Distribution,
and stated that Distributing 4 will, in connection with the plan that includes the
Controlled 2 Contribution and the External Distribution, and within aaamonths following
its receipt, if any, of the Additional Payment, use an amount of cash equal to the
Additional Payment to repay creditors to whom Distributing 4 had existing debt
obligations at the time of the External Distribution. Distributing 4 intends to establish a
separate bank account to deposit any Additional Payment received.
RULINGS

PLR-123957-14
3
Based solely on the information submitted and the representations made, and
conditioned upon Distributing’s execution of the closing agreement attached hereto and
made a party hereof, we rule as follows:
1.Any payment Distributing 4 receives as part of the Additional Payment, to the
extent not treated as interest by reason of section 483, will be treated as “other
property or money” within the meaning of section 361(b)(1) received by
Distributing 4 in exchange for the property Distributing 4 transferred to Controlled
2 in the Controlled 2 Contribution (Arrowsmith v. Commissioner, 344 U.S. 6
(1952)).
2.Provided that within aaamonths following its receipt, if any, of the Additional
Payment, Distributing 4 transfers an amount of cash equal to the Additional
Payment to repay creditors to whom Distributing 4 had existing debt obligations
at the time of the External Distribution, the transfer will be treated as a
distribution by Distributing 4 in pursuance of theplan of reorganization within the
meaning of Section 361(b). Sections 361(b)(1)(A), 361(b)(3).
CLOSING AGREEMENT
In connection with the issuance of this supplemental ruling letter, a closing
agreement is being entered into between the Internal Revenue Service and the
taxpayer with respect to certain of those issues affecting its tax liability on the basis set
forth above. Pursuant to our practice with respect to such agreements, the closing
agreement contains a stipulation to the effect that any change or modification of
applicable statutes enacted subsequent to the date of this agreement and made
applicable to the taxable period involved will render the agreement ineffective to the
extent that it is dependent upon such statutes. This private letter ruling will become
effective upon execution of the closing agreement.
CAVEATS
Except as expressly provided herein, no opinion is expressed or implied
concerning the tax treatment of the Supplemental Facts or the Proposed Transaction
under any provision of the Code and regulations or the tax treatment of any condition
existing at the time of, or effects resulting from the Supplemental Facts or the Proposed
Transaction that is not specifically covered by the above rulings or the Prior Letter
Ruling. In particular, we express no opinion regarding:
(i)The extent to which Distributing 4 will be required to include in its gross
income amounts treated as interest by reason of section 483 with respect
to the Additional Payment.
PROCEDURAL MATTERS

PLR-123957-14
4
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of
the Code provides that it may not be used or cited as precedent.
A copy of this letter must be attached to any income tax return to which it is
relevant. Alternatively, taxpayers filing their returns electronically may satisfy this
requirement by attaching a statement to their return that provides the date and control
number (PLR-123957-14) of the letter ruling.
In accordance with the Power of Attorney on file with this office, a copy of this
letter is being sent to your authorized representative.
Sincerely,
Maury Passman
Chief, Branch 4
Office of Associate Chief Counsel (Corporate)
cc: