IRS written determination 201550017

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: 201550017
Release Date: 12/11/2015
Index Numbers: 301.00-00, 305.00-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
-----------------, ID No. ------------
Telephone Number:
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Refer Reply To:
CC:CORP:B04
PLR-109581-15
Date:
September 11, 2015
LEGEND
Taxpayer = -------------------------------------
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State A=------
State B=------------
Year 1 =------
a=--
b=---
c=---
Dear ----------------:
This letter responds to a March 12, 2015 letter requesting rulings under §§ 301
and 305. The information provided in that letter and in later correspondence is
summarized below.
The rulings contained in this letter are based upon facts and representations
submitted on behalf of the taxpayer and accompanied by a penalty of perjury statement
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.

PLR-109581-15
2
FACTS
Taxpayer is a State A corporation that is the common parent of an affiliated
group of corporations that files a consolidated Federal income tax return on a calendar
year basis.
Taxpayer has two classes of common stock outstanding, Class A and Class B
(hereafter, the “Class A Shares”and the “Class B Shares,” and collectively, the
“Common Stock”).
Taxpayer also has a tranches of outstanding convertible debt (collectively, the
“Convertible Debt”). Each tranche is convertible into Class A Shares at a conversion
ratio and on the terms and conditions specified in the respective indenture agreement
(each an “Indenture”). The Indenture for each tranche of Convertible Debt provides for
an adjustment to the conversion ratio in the event that Taxpayer makes a distribution
(such as the distributions described herein) to its shareholders.
Taxpayer intends to make an election to be treated as a real estate investment
trust (“REIT”) pursuant to § 856(c)(1), effective on the first day of Year 1. In connection
with the REIT election, prior to the end of Year 1, Taxpayer intends to distribute to its
shareholders with respect to their stock, all of its earnings and profits that were, or will
be, accumulated by Taxpayer for all taxable periods ending prior to Year 1 (the “C Corp
E&P”), as required by § 857(a)(2)(B). The distribution of the C Corp E&P will be made
in one or more distributions. Taxpayer expects to make the first distribution of its C
Corp E&P prior to Year 1. Taxpayer will make any additional distributions of the
remainder of its CCorp E&P prior to the last day of Year 1. Prior to its first C Corp E&P
distribution, Taxpayer will relocate its jurisdiction of ownership from State A to State B
by undertaking certain steps that it represents will constitute a tax-free reorganization
under § 368(a)(1)(F). References herein to “Taxpayer” include any successor in such
reorganization.
Taxpayer will make the C Corp E&P distributions in the form of a combination of
cash and Common Stock. Each shareholder will have the right to elect (the “Election”),
subject to the pro ration described below, to receive its portion of a distribution in the
form of either all cash or all Common Stock. If a holder of Class A Shares (a “Class A
Shareholder”) elects to receive stock, the Class A Shareholder will receive additional
Class A Shares. If a holder of Class B Shares (a “Class B Shareholder”) elects to
receive stock, the Class B Shareholder will receive additional Class B Shares. If a
shareholder fails to make a valid election, that shareholder willbe deemed to have
made an election to receive its portion of the distribution in the form of all cash.
While each Class A Shareholder and Class B Shareholder will have the option to
elect to receive cash in lieu of Common Stock for its respective portionof a distribution,

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3
in no event will the total amount of cash available in a distribution (the “Cash Amount”)
be less than b% of the aggregate amount of a distribution (the “Maximum Cash
Distribution”).
If, for a distribution, the total number of shares of Common Stock for which an
election to receive cash is made would result in the payment of cash in an aggregate
amount that is less than or equal to the Cash Amount, then each shareholder electing to
receive cash will receive its portion of the distribution entirely in cash. If the total
number of shares of Common Stock for which an election to receive cash is made
would result in the payment of cash in an aggregate amount that is in excess of the
Cash Amount, then each shareholder electing to receive cash will receive a prorated
amount of cash and will receive the remainder of its portion of that distribution in
Common Stock. The cash proration will be made among shares for which a cash
election is made based upon the total number of shares without differentiating between
Class A Shares and Class B Shares. Once the cash proration is made, the remaining
portion of that distribution will be paid on Class A Shares with additional Class A
Shares, and on Class B Shares with additional Class B Shares. Accordingly, no
shareholder electing to receive cash will receive less than b% of its portion of the
distribution in cash.
The calculation of the number of Class A Shares to be received by the Class A
shareholders (“Class A Shareholders”), and the number of Class B Shares to be
received by the Class B shareholders (“Class B Shareholders”), will be determined over
a period of c business days ending as close as practicable to the distribution payment
date, based upon a formula utilizing market prices that is designed to equate in value
the number of shares to be received with the amount of money that could have been
received instead.
RULINGS
Based solely on the information and representations submitted, we rule as
follows:
(1) Any and all cash and Class A Sharesdistributed in a distribution by Taxpayer
to the Class A Shareholders pursuant to the Election will be treated as a distribution of
property with respect to the Class A Shares to which § 301 applies (§§ 301 and
305(b)(1)). Any and all cash and Class B Shares distributed in a distribution by
Taxpayer to the Class B Shareholders pursuant to the Election will be treated as a
distribution of property with respect to the Class B Shares to which § 301 applies (§§
301 and 305(b)(1)).
(2) The amount of the distribution of the Class A Shares received by a Class A
Shareholder electing to receive stock will be considered to equal the amount of money
that such shareholder could have received instead (§ 1.305-1(b)(2)). The amount of the
distribution of the Class B Shares received by a Class B Shareholder electing to receive

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stock will be considered to equal the amount of money that such shareholder could
have received instead (§ 1.305-1(b)(2)).

(3) Provided that, pursuant to the Election, Taxpayer distributescash to Class A
Shareholders or Class B Shareholders in a distribution, then any adjustments to the
conversion ratios of the Convertible Debt required as a result of the distribution shall
constitute deemed distributions, to which § 301 applies by reason of §§ 305(b)(2) and
(c), to the holders of the Convertible Debt.
CAVEATS
Except as expressly provided herein, no opinion is expressed or implied
concerning the federal income tax treatment of any aspect of any transaction or item
discussed or referenced in this letter. Moreover, no opinion is expressed as to whether
Taxpayer will qualify as a REIT under subchapter M, part II of Chapter 1 of the Code.
Furthermore, no opinion is expressed as to whether any distribution will satisfy the
distribution requirements of § 857(a)(1). Finally, no opinion is expressed as to whether
any distribution will be considered preferential under § 562(c).
PROCEDURAL STATEMENTS
This ruling letter is directed only to the taxpayer who requested it. Section
6110(k)(3) of theCode provides that it may not be used or cited as precedent.
A copy of this ruling 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 of this ruling letter.
Pursuant to a power of attorney on file in this office, a copy of this letter is being
sent to your authorized representatives.
Sincerely,
____________________________________
Isaac W. Zimbalist
Senior Technician Reviewer, Branch 1
Office of Associate Chief Counsel (Corporate)
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