IRS written determination 201510025

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: 201510025
Release Date: 3/6/2015
Index Number: 108.01-01, 108.03-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:ITA:B04
PLR-120001-14
Date:
November 06, 2014
LEGEND
Parent=--------------------------------------------------------
Corp A=--------------------------------------------------------
Country Z=---------------------
Act=----------------------------------------------------------
BkCourt=------------------------------------------------------------------------------------
CorpB=-----------------------------------------------------------
Corp C=-------------------------------------
Corp D=------------------------------------------------------------
Corp E=------------------------------------------
Corp F=-----------------------------------------
Corp G=---------------------
Date 1=-------------------
Date 2=--------------------------
Date 3=--------------------------
Date 4=-----------------------
Date 5=------------------------
$r=----------------
$s=--------------
$t=----------------
Dear------------:
This is in reply to your letter requesting a letter ruling that as a result of the recognition
and approval of foreign proceedings
1
under the Country Z Act pursuant to chapter 15 of
title 11 of the United States Bankruptcy Code by BkCourt, a U.S. Bankruptcy Court,

1
See11 U.S.C. § 101(23) (“Foreign proceeding” is defined as a “collective judicial or administrative
proceeding in a foreign country, including an interim proceeding, under a law relating to insolvency or
adjustment of debt in which proceeding the assets and affairs of the debtor are subject to control or
supervision by a foreign court, for the purpose of reorganization or liquidation.”)

PLR-120001-14
2
Debtors may exclude from income under § 108(a)(1)(A) of the Internal Revenue Code
discharge of indebtedness income arisingfrom restructuring of the U.S. Debt.
FACTS
Parent is a domestic corporation and is the wholly-owned subsidiary of Corp A, a
Country Z corporation. Parent is the parent corporation of a U.S. affiliated group made
up of Corp B, Corp C
2
, Corp D, Corp E, and Corp F (the Debtors); however, Parent is
not a Debtor and is not a participant in the insolvency proceedings. Parent’s direct and
indirect subsidiaries are ------------------------------------------------------------------------------------
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Certain debt obligations of Corp A’s direct and indirect affiliates and subsidiaries,
including the Debtors, forced a restructuring under Country Z insolvencyproceedings.
All of the Debtors are under the jurisdiction of the Country Z court.
As of Date 2, approximately $r (including accrued interest of $s) of the original
outstanding balance remained owing from the Debtors on the U.S. Debt. Pursuant to a
Restructuring Agreement between Corp A and the lenders, the U.S. Debt was amended
and restated. You represent that approximately $t of the U.S. Debt was forgiven.
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4
See11 U.S.C. § 1502(7) (“Recognition” means the entry of an order granting recognition of a foreign
main proceeding or foreign nonmain proceeding under this chapter.”)

PLR-120001-14
3
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LAW AND ANALYSIS
Section 61(a)(12) provides that gross income includes income from the discharge of
indebtedness.
Section 108(a)(1)(A) provides that gross income does not include any amount which
(but for this subsection) would be includiblein gross income by reason of the discharge
(in whole or in part) of indebtedness of the taxpayer if the discharge occurs in a title 11
case.
Section 108(b)(1) provides that the amount excluded from gross income under
§ 108(a)(1)(A) shall be applied to reduce the tax attributes of the taxpayer as provided
in § 108(b)(2).
Section 108(d)(2) provides that the term “title 11 case” means a case under title 11 of
the United States Code (relating to bankruptcy), but only if the taxpayer is under the
jurisdictionof the court in such case and the discharge of indebtedness is granted by
the court or is pursuant to a plan approved by the court.

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PLR-120001-14
4
To summarize the applicable law, § 108(a)(1)(A) excludes from gross income amounts
that would otherwise be included in gross income due to the discharge of indebtedness
if the discharge occurs in a title 11 case but only if (i) the taxpayer is under the
jurisdiction of the court and (ii) the discharge of indebtedness is granted by the court or
pursuant to a plan approved by the court.
In this case, discharge of indebtedness on the U.S. Debt meets the two requirements
for it to qualify as a discharge occurring in a title 11 case for purposes of § 108(a)(1)(A).
First, the Country Z court and BkCourt have concurrent jurisdiction over the Debtors.
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-------------------------------------------------------------------------------------. Second, under these
facts, the discharge of indebtedness was granted pursuant to a plan approved by
BkCourt.---------------------------------------------------------------------------------------------------------
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CONCLUSION
Based strictly on each of the facts submitted and representations made, the Debtors
may exclude from gross income under § 108(a)(1) cancellation of indebtedness income
arising from restructuring of the U.S. Debt.
Except as expressly provided herein, we do not expressor imply an opinion concerning
the tax consequences of any aspect of any transaction or item discussed or referenced
in this letter. For example, we do not express or imply any opinion concerning the
amount of the Debtors’ U.S. Debt that was discharged or the effect of a Chapter 15
proceeding under § 108(a)(1)(A) in cases other than the facts and representations of
this letter ruling.
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 of the
letter ruling.
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.

PLR-120001-14
5
In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to your authorized representatives.
Sincerely,
Michael J. Montemurro
Chief, Branch 4
Office of Associate Chief Counsel
(Income Tax & Accounting)
cc: