IRS written determination 201547003

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: 201547003
Release Date: 11/20/2015
Index Numbers: 721.00-00, 351.13-00
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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:B06
PLR-120675-14
Date:
May 19, 2015
Legend
X = -------------------------------------------
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GP1 =-----------------------
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GP2 =---------------------------------------------
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LP1 = ----------------------------------------------
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LP2 = -----------------------------------------------
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LP3 =-----------------------
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PLR-120675-14
2
Target MLP =-----------------------------------
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State A = ------------
Business B = -----------------------------------------------------------------
a = -------
Dear -------------:
This letter responds to your May 20, 2014, letter requesting a significant issue ruling
with regard to a proposed transaction (the "Proposed Transaction"). The material
information submitted in that letter and subsequent correspondence is summarized
below.
The ruling contained in this letter is based upon 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 materials submitted in support
of the request for ruling. Verification of the information, representations, and other data
may be required as part of the audit process.
This letter is issued pursuant to § 6.03 of Rev. Proc. 2014-1, 2014-1 I.R.B. 15, regarding
one or more significant issues under § 332, 351, 355, 368, or 1036. The ruling
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 transaction described in this letter or as to any issue not
specifically addressed by the ruling below.
Summary of Facts
X is a State A publicly-traded limited partnership. GP1, a State A limited liability
company, is X’s general partner. X owns the general partner interest, incentive
distribution rights (“IDRs”), and a portion of the publicly traded limited partner interests
in LP1. Additionally, X owns a special class of LP1 partnership interests that track a
percent of the economic attributes of thegeneral partner interest and IDRs of LP2, a
State A limited partnership.
In addition to its ownership interests in LP2, LP1 also owns the general partner interest,
IDRs, and limited partner interests in LP3, a publicly traded limited partnership. LP1,

PLR-120675-14
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LP2 and LP3 are publicly traded partnerships within the meaning of §7704, and are
directly involved in Business B.
Proposed Transaction

X has been engaged in acquisition discussions with GP2, the corporate general partner
of Target MLP, anunrelated publicly traded limited partnership engaged in Business B.
X proposes, in part, to undertake the following transaction:
(i)The members of GP1 will form a new limited liability company (“New LLC”),
which will elect to be taxed as a corporation forfederal income tax purposes.
(ii)GP2, the corporate general partner of Target MLP, will merge into New LLC
under State A law with New LLC surviving the merger.
(iii)New LLC will contribute its newly acquired interests in Target MLP to X in
exchange for limited partner interests of X (the “Exchange”).
Representations
X makes the following representations:
(a) Immediately after the Exchange, the total value of X’s direct ownership interests
in LP1 will be more than 50 percent of the total value of all equityinterests
outstanding in LP1.
(b) At the time of the Exchange, there will be no plan in existence pursuant to which
the total value of X’s direct ownership interests in LP1 will become less than 50
percent of the total value of all equity interests outstanding in LP1.
Ruling
Based solely on the information submitted and representations set forth above, we rule
as follows:
Provided that immediately after the Exchange, X’s direct ownership interests in LP1 will
represent 50 percent or more of the total value of all LP1 equity interests, X’s LP1 equity
interests will be disregarded and X will be deemed to own its ratable share of LP1’s
assets for purposes of determining whether X is an investment company under
§ 351(e).
Caveats

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Except as expressly provided herein, no opinion is expressed or implied concerning the
tax treatment of the Proposed Transaction under other provisions of the Code or
regulations or the tax treatment of any condition existing at the time of, or effects
resulting from, the Proposed Transaction that is not specifically covered by the above
ruling. In particular, no opinion is expressed on (i) the merger described in step (ii)
above, (ii) whether X’s ownership interests in LP1 will represent 50 percent or more of
the total value of all LP1 equity interests immediately after the Exchange, and (iii)
whether a plan exists at the time of the Exchange pursuant to which X’s direct
ownership interests in LP1 will represent less than 50 percent of the total value of all of
LP1’s equity interests.
Procedural Statements
This ruling is directed only to the taxpayer who requested it. Section 6110(k)(3) of the
Code provides that this letter may not be used or cited as precedent.
A copy of this letter must be attached to any federal information and 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 numberof the letter ruling.
In accordance with the powers of attorney on file with this office, a copy of this letter is
being sent to your authorized representatives.
Sincerely,
_Richard K. Passales_________
Richard K. Passales
Senior Counsel, Branch 4
Office of Associate Chief Counsel
(Corporate)