A nuclear decommissioning fund transfers tax-free when a shut-down reactor is sold to a decommissioning specialist

Plain-English summary

An energy company owns a nuclear generating unit that has permanently shut down and is being decommissioned. It maintains a qualified nuclear decommissioning fund (a QDF) under § 468A, a tax-favored trust that holds money set aside to clean up and dismantle the plant. The company plans to sell the subsidiary that owns the unit and the fund to a firm that specializes in decommissioning nuclear plants, and the parties will jointly make a § 338(h)(10) election, so the deal is treated as a sale of the unit's assets (including the fund) for tax purposes. The sellers and buyer asked the IRS to confirm the fund's tax treatment survives the transfer. The IRS ruled favorably on all five points: the fund stays a qualified fund and is not disqualified by the sale, neither the fund nor the taxpayers recognize gain or loss on the deemed transfer of fund assets, and the fund keeps the same tax basis in its assets after the sale. The rulings are conditioned on regulatory approval of the transaction, and the IRS expressed no opinion on the § 338 election itself.

Ruling snapshot

• Question: Does a qualified § 468A nuclear decommissioning fund keep its tax-qualified status and transfer without gain, loss, or a basis change when the reactor it funds is sold in a § 338(h)(10) deemed asset sale?
• Outcome: Approved (all five requested rulings granted, conditioned on regulatory approval)
• Key authorities: IRC § 468A; Treas. Reg. §§ 1.468A-1, 1.468A-5, 1.468A-6

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202218022 Third Party Communication: None
Release Date: 5/6/2022 Date of Communication: Not Applicable
Index Number: 468A.06-03
Person To Contact:

------------------------------- ------------------, ID No. -----------------
--------------------------- Telephone Number:
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------------------------------ Refer Reply To:
------------------------------------------- CC:PSI:B06
---------------------------- PLR-117118-21
--------------------------- Date:
February 08, 2022

Re: Deemed Transfer of a Qualified Fund
under Section 468A

LEGEND

Parent = -------------------------------------------------------
Sub = ------------------------------------------------------------
Seller = --------------------------------------------------------------------
Owner = ----------------------------------------------------------------------
Buyer = ------------------------------------------------------
ProjectCo = ------------------------------------------------------
Unit = --------------------------------------------------------------------------------------------
-------------------------
State A = --------------
State B = ----------
State C = ------
Commission A = -------------------------------------------
Commission B = ------------------------------------------------------
Agency = -----------------------------
A Method = --------------
B Method = -----------
Date 1 = --------------------------
Date 2 = ----------------
Year 1 = -------
Year 2 = -------
a = -----
b = --------------
c = ---------
d = --------------
e = -------------

Dear -------------------:
PLR-117118-21 2

   This letter responds to your request, dated August 20, 2021, for a letter ruling

regarding certain federal income tax consequences under section 468A of the Internal
Revenue Code (Code) with respect to a proposed transaction. This letter is being
issued electronically in accordance with Rev. Proc. 2020-29, 2020-21 I.R.B. 859. A
paper copy will not be mailed to you. The relevant facts as represented in your
submission are set forth below.

                                      FACTS

    Owner, a State A corporation, owns a% of the interest in the Unit, a nuclear

power generating facility and its associated facilities. Owner was the Unit’s last
commercial operator. The Unit ceased commercial operations in Year 1. The Unit is
currently being decommissioned using the A Method permitted by Commission A.
Transfer of all of the Unit’s spent nuclear fuel to an independent spent fuel storage
installation (ISFSI) owned by Owner was completed in Year 2.

    Owner is a wholly-owned subsidiary of Seller, a State B corporation. Seller is a

wholly-owned subsidiary of Sub, a State B corporation. Sub is a wholly-owned
subsidiary of Parent, a State B corporation. Parent and its subsidiaries (including
Seller) are principally involved in the generation, transmission, and distribution of
energy. Parent is the common parent of the affiliated group that includes Owner (Seller
Group). Seller joins in the consolidated federal income tax return electronically filed for
the Seller Group by Parent. Parent files the consolidated return for the Seller Group on
a calendar year basis using an accrual method of accounting.

   Buyer is the common parent of an affiliated group of corporations (Buyer Group).

Buyer files the consolidated federal income tax return for the Buyer Group on a calendar
year basis using an accrual method of accounting. Buyer and its affiliates specialize in
providing nuclear services, including the decommissioning of commercial nuclear power
generation facilities. Buyer owns all of the equity interests in ProjectCo, a State C
limited liability company disregarded as a separate entity from Buyer for federal income
tax purposes.

   Owner maintains a qualified nuclear decommissioning reserve fund with respect

to the Unit (QDF) pursuant to a trust agreement (QDF Trust Agreement) and
Commission A and other applicable regulatory requirements. Seller, Owner, Buyer, and
ProjectCo (collectively, Taxpayers) represent that the QDF is irrevocably committed to
the decommissioning of the Unit and is otherwise organized and maintained in a
manner intended to satisfy the requirements for a qualified fund within the meaning of
§ 468A and the regulations promulgated thereunder.

  As of Date 1, the total value of the assets of the QDF was approximately $b, with

such entire balance set forth in the portion of the trust fund that would be returned to the
former ratepayers, if any excess remains after completion of decommissioning and
PLR-117118-21 3

satisfaction of all associated liabilities. Taxpayers represent that the amount of Owner’s
nuclear decommissioning liability (NDL) for the Unit has been determined by experts in
the nuclear decommissioning industry whose estimates have been accepted by
Commission A and Commission B.

   Seller intends to sell, through ProjectCo, all of the issued and outstanding shares

of capital stock of Owner to Buyer (Transaction). Taxpayers will jointly make an election
described in § 338(h)(10) with respect to the Transaction (Election). Taxpayers
represent that the Election will result in the deemed transfer from Seller to Buyer, for
federal income tax purposes, of all of the assets and liabilities of Owner, including the
Unit and the QDF.

   Taxpayers represent that as a result of the Transaction, Buyer expects to realize

certain decommissioning efficiencies, including a change in the Commission A
decommissioning method for the Unit from the A Method to the B Method, which Buyer
estimates will shorten the time needed to decommission the Unit.

    Seller and Buyer entered into a stock purchase agreement, dated Date 2, under

which Seller will sell all of the issued and outstanding shares of capital stock of Owner
to Buyer for a purchase price of $c (Purchase Agreement). Taxpayers represent that
this transaction will be treated as a sale of assets for federal income tax purposes, and
thus, that the Unit and QDF will be treated as transferred to Buyer.

    The consummation of the Transaction pursuant to the Purchase Agreement

(Closing) is conditional on the approval of an application with Commission A to transfer
control of the operating license for the Unit and the general license for ISFSI
(collectively, Commission A License) from Seller and the Seller Group to Buyer and the
Buyer Group through the Transaction (Commission A Application). Taxpayers filed the
Commission A Application, and an application for approval of the Transaction with
Commission B, after the execution of the Purchase Agreement.

   For the period following the Closing, Owner will be included in the Buyer Group

and the Buyer Group’s consolidated federal income tax return. From and after the
Closing, Owner will continue to maintain the QDF as a qualified fund within the meaning
of § 468A.

    The Closing is subject to various conditions precedent that Taxpayers represent

are customary for a sale such as the Transaction, including the following requirements:
(i) receipt of Commission A approval of the Commission A Application, (ii) receipt of
Commission B approval of the Transaction, (iii) receipt of favorable rulings from the
Internal Revenue Service (Service) pursuant to the ruling request, and (iv) that the
balance of the QDF as of the Closing be at least equal to $d (with certain adjustments).
Taxpayers represent the dollar amount in this last requirement has been determined by
Buyer to be sufficient to decommission the Unit and is consistent with estimates of
Owner’s NDL that have been, or will be, approved by Owner’s regulators.
PLR-117118-21 4

    The Purchase Agreement requires that the Election be jointly made by the Seller

Group and the Buyer Group and that such parties and the Owner report the Transaction
consistent with the Election for federal income tax purposes. The Purchase Agreement
also requires all Owner employees to be reassigned to Seller prior to the Closing, along
with all associated employment liabilities and deferred compensation plans.

    The Purchase Agreement includes various representations and warranties of the

Taxpayers, excluded asset and liability provisions, and associated indemnity obligations
therewith, all of which Taxpayers represent are customary for a commercial
arrangement such as the Transaction. Taxpayers represent that in general, such terms
require Buyer to assume all liabilities arising out of or related to the Unit and Owner as
part of the Transaction (other than certain employee-related liabilities, including with
respect to Owner employees reassigned to Seller), pre-closing taxes, and liabilities with
respect to certain minor excluded assets. Taxpayers represent that in particular, Buyer
will assume any and all obligations associated with: (i) the retirement, dismantlement,
and removal of the Unit (including the ISFSI constructed for the interim storage of spent
nuclear fuel in casks at the Unit site) in compliance with all applicable nuclear laws,
rules, and regulations; (ii) the reduction or removal of radioactivity at or around the site
to a level permitting the release of all of the site for unrestricted use; (iii) any other
process required to restore the site in accordance with all applicable decommissioning
studies, laws, and orders to the extent applicable to retirement of a nuclear power plant;
and (iv) management of spent nuclear fuel until acceptance by Agency. Taxpayers
represent that in critical part, none of these provisions in the Purchase Agreement
operate to exclude Buyer from the benefits and burdens of ownership of the Unit and
the QDF for the period following the Closing.

    The Purchase Agreement also includes a post-Closing QDF § 468A and nuclear

regulatory law maintenance covenant that applies to Owner and Buyer Group (QDF
Maintenance Covenant). The QDF Maintenance Covenant generally provides that
Buyer agrees to maintain the QDF in accordance with all applicable nuclear laws,
relevant trust agreements, and § 468A and the regulations promulgated thereunder, in
order to ensure that the QDF will be treated as a nuclear decommissioning fund (as
defined in § 468A(e)(5) and § 1.468A-5(b)(2)), until the ultimate termination of the
qualified status of the fund upon substantial completion of the decommissioning of the
Unit.

    The Purchase Agreement also provides that Buyer will obtain performance bonds

by the Closing to support the decommissioning of the Unit and management of Unit
spent fuel. Taxpayers represent that the proceeds of these bonds (totaling up to $e and
phasing up and down according to the nature of the work performed in the phases) will
be deposited in a nonqualified fund under § 468A, if called upon, and can only be used
to facilitate the decommissioning of the Unit or management of Unit spent fuel.
Taxpayers also represent that owner and Buyer are required to notify Commission A
prior to reducing the value of the performance bonds.
PLR-117118-21 5

    Taxpayers represent that they intend to enter into certain ancillary agreements

establishing certain rights and commitments associated with the decommissioning of
the Unit (Ancillary Agreements). Taxpayers represent that Buyer will be providing
certain limited and customary § 468A eligible decommissioning planning services during
the period between the execution date of the Purchase Agreement and the Closing.
Taxpayers represent that such services are to help facilitate the receipt of regulatory
approvals for the Transaction during such period and in anticipation of the prompt
commencement of decommissioning activities following the Closing. Taxpayers
represent that the costs of such services are expected to be funded by draws from the
QDF, and that such services will be provided pursuant to a purchase order provided
pursuant to a planning services agreement attached as an exhibit to the Purchase
Agreement.

    Taxpayers represent that they anticipate that Seller and Seller Group will provide

a variety of § 468A eligible decommissioning services during the post-Closing period
that will facilitate the decommissioning of the Unit by Buyer. Taxpayers represent that
such services will be compensated at pre-negotiated fixed rates and include: (i) certain
decommissioning and decontamination site consulting support services and other
ancillary consulting and support services, pursuant to an agreement attached as an
exhibit to the Purchase Agreement; (ii) certain management and security services
related to the ISFSI and portions of the Unit located outside the ISFSI protected area,
pursuant to the form of an agreement attached as an exhibit to the Purchase
Agreement; and (iii) certain information technology, data, and personnel-related
transition services pursuant to the form of an agreement attached as an exhibit to the
Purchase Agreement. Taxpayers represent that such services primarily represent a
continuation of various decommissioning-related services already being performed prior
to the Closing by Owner and Seller, together with certain information technology and
other transition services customary for a commercial arrangement such as the
Transaction. Taxpayers represent that a majority of the costs of such services are
expected to be funded by draws from the QDF, to the extent permitted by § 468A and
the regulations promulgated thereunder, as required by the QDF Maintenance
Covenant.

     Taxpayers represent that after approval of the Commission A Application and the

Closing: (i) Owner (as now controlled by Buyer) will be licensed to possess the Unit and
will assume responsibility for all Commission A licensed activities at the Unit site,
including responsibility under the Commission A License to complete decommissioning;
(ii) neither Seller nor any of its affiliates will be a licensee under the Commission A
License or have any authorized rights or obligations under the Commission A License
for the Unit; and (iii) Buyer will assume full responsibility for funding the costs of
decommissioning the Unit. Taxpayers represent that as part of the Transaction, Buyer
will acquire full control and title to the QDF, which is expected to be sufficient to satisfy
the expected Unit decommissioning costs, and that in the event that it is insufficient to
PLR-117118-21 6

do so, Owner (as now controlled by Buyer) and ultimately Buyer Group will be legally
responsible to complete the funding of Unit decommissioning.

    Assuming that Commission A approves the Transaction and the Commission A

Application, Seller represents with respect to the QDF that immediately prior to the
Closing: (i) Owner will have a qualifying interest in the Unit within the meaning of
§ 1.468A-1(b)(2); (ii) Owner will have maintained the QDF as a trust under applicable
state law for the exclusive purpose of providing funds for decommissioning of the Unit
as such term is defined by § 468A and the regulations promulgated thereunder; (iii)
Owner will have maintained the QDF as a separate and its sole § 468A qualified fund
for the Unit; (iv) Owner will not have made any contributions to the QDF other than for
which an Owner income tax deduction will be allowed under § 468A and the regulations
promulgated thereunder; (v) The assets of the QDF will have been used exclusively to:
(a) satisfy, in whole or in part, liability for decommissioning costs of the Unit, (b) pay
administrative costs and other incidental expenses of the QDF, and (c) make
investments, to the extent the assets of the QDF were not needed to satisfy the
purposes in (a) and (b) above; (vi) The QDF Trust Agreement provides that all QDF
assets must be used as authorized in § 468A and the regulations promulgated
thereunder, including the prohibition against self-dealing, and that the QDF Trust
Agreement cannot be amended to violate such provisions; and (vii) The QDF will not
have engaged in an act of self-dealing.

    Assuming that Commission A approves the Transaction and the Commission A

Application, Buyer represents that immediately after the Closing: (i) Buyer will cause
Owner to maintain the QDF as a trust under applicable state law for the exclusive
purpose of providing funds for decommissioning of the Unit; (ii) Buyer will cause Owner
to maintain the QDF as a separate and its sole § 468A qualified fund for the Unit; (iii)
Owner will not make any contributions to the QDF other than for which an Owner
income tax deduction will be allowed under § 468A and the regulations promulgated
thereunder; (iv) The assets of the QDF will be used exclusively to: (a) satisfy, in whole
or in part, liability for the decommissioning costs of the Unit, (b) pay administrative costs
and other incidental expenses of the QDF, and (c) make investments, to the extent the
assets of the QDF are not needed to satisfy the purposes in (a) or (b) above; (v) The
QDF Trust Agreement provides that all QDF assets must be used as authorized in
§ 468A and the regulations promulgated thereunder, including the prohibition against
self-dealing, and that the QDF Trust Agreement cannot be amended to violate such
provisions.

                             RULINGS REQUESTED

    Subject to receipt of approval from Commission A, Taxpayers request the

following rulings, effective as of the Closing:

  1. The QDF will remain a qualified fund that satisfies the requirements of § 468A

and § 1.468A-5 following consummation of the Transaction.
PLR-117118-21 7

   2. The QDF will not be disqualified by reason of the Transaction.

  3. The QDF will not recognize gain or loss or otherwise take any income or

deduction into account as a result of the Transaction.

   4. None of the Taxpayers will be required to recognize gain or loss or otherwise

take any income or deduction into account as a result of a deemed transfer of assets
from the QDF as part of the Transaction.

    5. After the Transaction, the QDF will have a tax basis in each of its assets that

is the same as the QDF’s tax basis in those assets immediately prior to the Transaction.

                               LAW AND ANALYSIS

   Section 468A(a) provides that a taxpayer that elects the application of § 468A

shall be allowed as a deduction for any taxable year the amount of payments made by
the taxpayer to a nuclear decommissioning reserve fund during such taxable year.

  Section 1.468A-1(b)(1) provides that an “eligible taxpayer” is a taxpayer that

possesses a qualifying interest in a nuclear power plant.

   Section 1.468A-1(b)(5) provides that the term “nuclear power plant” means any

nuclear power reactor used predominantly in the trade or business of the furnishing or
sale of electric energy. Each unit (i.e., nuclear reactor) located on a multi-unit site is a
separate nuclear power plant. The term “nuclear power plant” includes the portion of
the common facilities of a multi-unit site allocable to a unit on that site.

    Under § 1.468A-1(b)(2), the definition of the term “qualifying interest” includes a

direct ownership interest.

   Under § 1.468A-1(b)(3), the term “direct ownership interest” does not include

stock in a corporation that owns a nuclear power plant.

   Section 468A(e)(1) requires each taxpayer who elects the application of § 468A

to establish a nuclear decommissioning reserve fund with respect to each nuclear
power plant to which such election applies.

   Section 1.468A-1(b)(4) provides that the terms “nuclear decommissioning fund”

and “qualified nuclear decommissioning fund” mean a fund that satisfies the
requirements of § 1.468A-5 (Qualified Fund). The term “nonqualified fund” means a
fund that does not satisfy those requirements.

  Section 1.468A-5(a)(1)(i) provides that a Qualified Fund must be established and

maintained at all times in the United States pursuant to an arrangement that qualifies as
PLR-117118-21 8

a trust under state law. Such trust must be established for the exclusive purpose of
providing funds for the decommissioning of one or more nuclear power plants, but a
single trust agreement may establish multiple funds for such purpose.

   Section 1.468A-5(a)(1)(ii) provides that a separate Qualified Fund is required for

each electing taxpayer and for each nuclear power plant with respect to which an
electing taxpayer possesses a qualifying interest.

    Section 1.468A-5(a)(1)(iii) provides that an electing taxpayer can maintain only

one Qualified Fund for each nuclear power plant with respect to which the taxpayer
elects the application of § 468A.

    Section 1.468A-5(a)(3)(i) provides that the assets of a Qualified Fund are to be

used exclusively – (A) to satisfy, in whole or in part, the liability of the electing taxpayer
for decommissioning costs of the nuclear power plant to which such fund relates; (B) to
pay administrative costs and other incidental expenses of such fund; and (C) to the
extent that the assets of such fund are not currently required for the purposes described
in (A) and (B) above, to make investments.

    Section 1.468A-5(c)(1)(i) provides that, except as otherwise provided in

§ 1.468A-5(c)(2), the Service may, in its discretion, disqualify all or any portion of a
Qualified Fund if at any time during its taxable year – (A) the fund does not satisfy the
requirements of § 1.468A-5(a); or (B) the fund and a disqualified person engage in an
act of self-dealing (as defined in § 1.468A-5(b)(2)).

   Section 1.468A-6 describes the federal income tax consequences of a transfer of

the assets of a Qualified Fund in connection with a sale, exchange, or other disposition
by a taxpayer (Transferor) of all or a portion of its qualifying interest in a nuclear power
plant to another taxpayer (Transferee).

    Section 1.468A-6(a) provides that for purposes of § 1.468A-6, a nuclear power

plant includes a plant that previously qualified as a nuclear power plant and that has
permanently ceased to produce electricity.

    Section 1.468A-6(b) provides that § 1.468A-6 applies if – (1) immediately before

the disposition, the Transferor maintained a Qualified Fund with respect to the interest
disposed of; and (2) immediately after the disposition – (i) the Transferee maintains a
Qualified Fund with respect to the interest acquired; and (ii) the interest acquired is a
qualifying interest of the Transferee in the nuclear power plant; and (3) in connection
with the disposition, either – (i) the Transferee acquires part or all of the Transferor’s
qualifying interest in the plant and a proportionate amount of the assets of the
Transferor’s Qualified Fund (all such assets if the Transferee acquires the Transferor’s
entire qualifying interest in the plant) is transferred to a Qualified Fund of the
Transferee; or (ii) the Transferee acquires the Transferor’s entire qualifying interest in
the plant and the Transferor’s entire Qualified Fund is transferred to the Transferee; and
PLR-117118-21 9

(4) the Transferee continues to satisfy the requirements of § 1.468A-5(a)(1)(iii), which
permits an electing taxpayer to maintain only one Qualified Fund for each plant.

   Section 1.468A-6(c) provides that a disposition that satisfies the requirements of

§ 1.468A-6(b) will have the following tax consequences at the time it occurs:

         (1)(i) Except as provided in § 1.468A-6(c)(1)(ii), neither the
  Transferor nor the Transferor’s Qualified Fund will recognize gain or loss or
  otherwise take any income or deduction into account by reason of the
  transfer of a proportionate amount of the assets of the Transferor’s Qualified
  Fund to the Transferee’s Qualified Fund (or by reason of the transfer of the
  Transferor’s entire Qualified Fund to the Transferee). For purposes of
  §§ 1.468A-1 through 1.468A-9, this transfer (or the transfer of the
  Transferor’s Qualified Fund) will not be considered a distribution of assets
  by the Transferor’s Qualified Fund.

          (1)(ii) Notwithstanding § 1.468A-6(c)(1)(i), if the Transferor has made
  a special transfer under § 1.468A-8 prior to the transfer of a Qualified Fund
  (or its assets), any deduction with respect to that special transfer allowable
  under § 468A(f)(2) for a taxable year ending after the date of the transfer of
  the Qualified Fund or its assets (the unamortized special transfer deduction)
  is allowed under § 468A(f)(2)(C) for the taxable year that includes the date
  of the transfer of the Qualified Fund or its assets. If the taxpayer transfers
  only a portion of its interest in a nuclear power plant, only the corresponding
  portion of the unamortized special transfer deduction qualifies for the
  acceleration under § 468A(f)(2)(C).

         (2) Neither the Transferee nor the Transferee’s Qualified Fund will
  recognize gain or loss or otherwise take any income or deduction into
  account by reason of the transfer of a proportionate amount of the assets
  of the Transferor’s Qualified Fund to the Transferee’s Qualified Fund (or by
  reason of the transfer of the Transferor’s Qualified Fund to the Transferee).
  For purposes of §§ 1.468A-1 through 1.468A-9, this transfer (or the transfer
  of the Transferor’s Qualified Fund) will not constitute a payment or a
  contribution of assets by the Transferee to its Qualified Fund.

         (3) Transfers of assets of a Qualified Fund to which this section
  applies do not affect basis. Thus, the Transferee’s Qualified Fund will have
  a basis in the assets received from the Transferor’s Qualified Fund that is
  the same as the basis of those assets in the Transferor’s Qualified Fund
  immediately before the disposition.

   Under § 1.468A-6(f), the Service may treat a disposition as satisfying the

requirements of § 1.468A-6 if it determines that this treatment is necessary or
appropriate to carry out the purposes of § 468A and §§ 1.468A-1 through 1.468A-9.
PLR-117118-21 10

                                     RULINGS

    Based solely on the information submitted and representations made, we reach

the following conclusions, effective as of the Closing:

  1. The QDF will remain a qualified fund that satisfies the requirements of § 468A

and § 1.468A-5 following consummation of the Transaction.

   2. The QDF will not be disqualified by reason of the Transaction.

  3. The QDF will not recognize gain or loss or otherwise take any income or

deduction into account as a result of the Transaction.

   4. None of the Taxpayers will be required to recognize gain or loss or otherwise

take any income or deduction into account as a result of a deemed transfer of assets
from the QDF as part of the Transaction.

    5. After the Transaction, the QDF will have a tax basis in each of its assets that

is the same as the QDF’s tax basis in those assets immediately prior to the Transaction.

   Except as specifically set forth above, no opinion is expressed or implied

concerning the federal income tax consequences of the matters described above under
any other provision of the Code and the regulations thereunder. Specifically, no opinion
is expressed or implied concerning any result of any election made under § 338 of the
Code.

   This ruling is directed only to the taxpayer who requested it. Section 6110(k)(3)

of the Code provides that it may not be used or cited as precedent. This ruling is based
upon information and representations submitted by the taxpayer and accompanied by
penalties of perjury statements executed by the appropriate parties. While this office
has not verified any of the material submitted in support of the request for a ruling, it is
subject to verification on examination. This ruling is specifically conditioned on the
approval of the Transaction by the regulatory bodies with jurisdiction over the
Transaction.

    In accordance with the powers of attorney on file with this office, copies of this

letter ruling are being sent to your authorized representatives. A copy of this letter
PLR-117118-21 11

ruling is also being sent to the LB&I Policy Office.

                                               Sincerely,

                                               Patrick S. Kirwan

                                               Patrick S. Kirwan
                                               Chief, Branch 6
                                               Office of the Associate Chief Counsel
                                               (Passthroughs & Special Industries)

Enclosure
Copy for § 6110 purposes

cc: