IRS Written Determinations
Free IRS private letter rulings, technical advice memoranda, and Chief Counsel advice with plain-English summaries and the official IRS release on every page.
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Closing agreement enabled a retroactive QEF election
A U.S. taxpayer held a minority interest in a foreign company that became a passive foreign investment company. The taxpayer's qualified adviser did not identify the PFIC status or explain the qualifi…
Adviser error qualified an investor for retroactive QEF relief
A U.S. taxpayer owned less than 10 percent of a foreign company that became a passive foreign investment company. A qualified tax adviser did not identify the PFIC status or tell the taxpayer about th…
Temporary staffing business qualified under the small-business-stock rules
A shareholder sold stock in a C corporation that matched experienced executives and managers with clients needing temporary staff or permanent executives. For temporary placements, clients identified …
Retroactive qualified electing fund election approved
A U.S. taxpayer indirectly owned shares of a foreign corporation through a foreign grantor trust but did not make a timely qualified electing fund election. Two accounting firms with international tax…
Condemned utility assets' deferred tax reserves had to be removed
A city condemned the regulated utility assets of two subsidiaries, and the taxpayer deferred gain under section 1033 by investing the proceeds in replacement utility property. After the condemnation, …
Mortgage certificate exchange trust qualifies as fixed investment trust
A mortgage-backed securities sponsor proposed exchange trusts that would hold one class of REMIC or grantor trust certificates. Investors could exchange those certificates for matching classes with fi…
Retroactive PFIC elections allowed after adviser error
A U.S. taxpayer invested in two foreign corporations that were passive foreign investment companies, but the taxpayer's qualified adviser did not identify their PFIC status. The adviser therefore did …
Late mixed straddle account elections allowed
An individual traded exchange-listed put options while holding interests in the same publicly traded trust, creating potential mixed straddles. The taxpayer's return-preparation firm learned of the tr…
Late real-property election for advertising displays allowed
A partnership in an outdoor advertising business agreed during a partial sale to elect to treat its outdoor advertising displays as real property under section 1033(g)(3). Its accountant filed the par…
Data migration company was not a consulting business for qualified small business stock purposes
A shareholder asked whether a company that provides data migration and management services operated a qualified trade or business for the section 1202 exclusion for gain on qualified small business st…
Data migration company was not a consulting business for qualified small business stock purposes
A shareholder asked whether a company that provides data migration and management services operated a qualified trade or business for the section 1202 exclusion for gain on qualified small business st…
Data migration company was not a consulting business for qualified small business stock purposes
A shareholder asked whether a company that provides data migration and management services operated a qualified trade or business for the section 1202 exclusion for gain on qualified small business st…
Estate received 120 days to make a late carryover-basis election
The executor of an estate for a person who died in 2010 missed the deadline to file Form 8939. That form would elect out of the estate-tax rules then reinstated for 2010 and instead apply section 1022…
Fund's seven late first-year elections were treated as timely
A newly formed investment fund intended to make seven elections on its first regulated investment company return. The elections covered RIC status, deferral of late-year losses, post-year distribution…
How a surviving spouse's renunciation of her QTIP marital-trust interest is taxed as a gift, with net-gift and estate-inclusion consequences
When a spouse dies, property left in a "QTIP" marital trust escapes estate tax at the first death but is taxed later, either in the surviving spouse's estate when she dies or as a gift if she gives up…
IRS rules a company's conversion from an LLC to a corporation does not modify its outstanding debt
When the terms of a debt change enough, tax law treats the old debt as swapped for a new one, which can trigger taxable gain or loss (a "significant modification" under IRC Section 1001). Here, an ope…
Transferable development rights count as "like kind" to real estate, so they can be replacement property in a § 1031 exchange
A real estate partnership wanted to sell one property and, in a like-kind exchange under section 1031, use the proceeds to buy "transferable development rights" (TDRs). TDRs are zoning credits: they l…
IRS lets a trust make a late "qualified electing fund" election for a foreign investment its advisers overlooked
A domestic trust invested in a foreign company that was a passive foreign investment company (PFIC). U.S. owners of a PFIC face a harsh default tax regime unless they make a "qualified electing fund" …
Trust gets consent to make a late "qualified electing fund" election for its foreign fund investment
A domestic trust held an interest in a foreign company that is a passive foreign investment company (PFIC). U.S. owners of a PFIC can elect to treat it as a "qualified electing fund" (QEF) under secti…
Tax-free split of two insurance businesses through a "D" reorganization and a chain of section 355 spin-offs
A foreign-owned insurance group wanted to separate two insurance businesses, called Business A and Business B, into different branches of its corporate family tree. The plan moved Business B's insuran…
Splitting a GST-grandfathered trust into four equal trusts is tax-free across income, gift, estate, and GST tax
A trust created long ago (irrevocable before September 25, 1985, so it is "grandfathered" and exempt from the generation-skipping transfer, or GST, tax) held everything in a single share for one child…
Cloud-software company is not a "reputation or skill" business, so its stock can qualify for the section 1202 gain exclusion
A founder who sold his stock in an enterprise cloud-software company asked the IRS to confirm that the company is not the kind of business disqualified from the section 1202 tax break for "qualified s…
Partnership allowed to revoke an accidental election out of the installment method
A partnership sold property and took back promissory notes payable over several years, so the gain qualified to be reported under the "installment method," which spreads the taxable gain over the year…
Consent to a retroactive QEF election after an advisor missed the foreign company's PFIC status
A U.S. taxpayer owned an interest in a foreign company that was a passive foreign investment company (a "PFIC"). PFIC ownership triggers unfavorable U.S. tax rules unless the shareholder makes a "qual…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
Settling a grandfathered trust's ambiguous per-stirpes clause keeps its GST-exempt status and triggers no gift or income tax
A family trust created before September 25, 1985 is "grandfathered," meaning it is exempt from the generation-skipping transfer (GST) tax. The trust's will language directed that, when the last of cer…
FCC spectrum-clearing payments and replacement satellites qualify for Section 1033 nonrecognition
A satellite communications company held FCC licenses to use part of the radio spectrum called the "C-band." The FCC ordered satellite operators to vacate the lower portion of the C-band so it could be…
Court-approved settlement of an ambiguous trust term triggers no GST, gift, or income tax
An old trust, created and made irrevocable before September 25, 1985 (so it is grandfathered as exempt from generation-skipping transfer, or GST, tax), had a will provision that was ambiguous about wh…
Court-approved settlement of an ambiguous trust term triggers no GST, gift, or income tax
An old trust, created and made irrevocable before September 25, 1985 (so it is grandfathered as exempt from generation-skipping transfer, or GST, tax), had a will provision that was ambiguous about wh…
Laid-off startup employee gets more time to make a QSBS gain-rollover election
An early startup employee held qualified small business stock (QSBS), sold some of it after being laid off, and within 60 days used the proceeds to buy more stock in the same company. Section 1045 let…
Court-approved settlement of an ambiguous trust term triggers no GST, gift, or income tax
An old trust, created and made irrevocable before September 25, 1985 (so it is grandfathered as exempt from generation-skipping transfer, or GST, tax), had a will provision that was ambiguous about wh…
A blockchain's change from proof of work to proof of stake does not tax existing cryptocurrency holders
Chief Counsel considered a cryptocurrency holder whose blockchain changed its transaction-validation method from proof of work to proof of stake. The holder kept the same ten units, the earlier transa…
Trust settlement causes no GST, gift, gain, or excess-income tax consequences
A trust that became irrevocable before September 25, 1985 contained ambiguous instructions for dividing its remainder among descendants when it terminated. The potential beneficiaries negotiated a cou…
Gain from repeatedly selling syndicated conservation easement LLC interests is ordinary income under section 1221
A promoter ran syndicated conservation easement (SCE) deals: it would buy into land-holding LLCs, subdivide the land, package interests into new LLCs, and sell those interests to investors who were pr…
IRS rules that a rancher's perpetual water-diversion rights are "real property" like-kind to land, so they can be swapped tax-free under Section 1031
Section 1031 lets a taxpayer swap one piece of real property for another "like-kind" real property without paying tax on the gain right away. The question here was whether water rights count as "real …
IRS blesses a nonprofit health insurer's "unstacking" into a holding-company structure, ruling its membership interests count as stock and it stays a Section 833 organization
A nonprofit, non-stock health insurance company (the kind taxed under Sections 501(m) and 833, which covers Blue Cross Blue Shield-type organizations) wanted to reorganize its corporate family under a…
Splitting a GST-grandfathered trust into five family trusts triggers no tax
A family asked the IRS how dividing one irrevocable trust into five separate trusts, one for each branch of the family, would be taxed. The original trust was created before the generation-skipping tr…
Splitting a GST-grandfathered trust into five family trusts triggers no tax
A family asked the IRS how dividing one irrevocable trust into five separate trusts, one for each branch of the family, would be taxed. The original trust was created before the generation-skipping tr…
Splitting a GST-grandfathered trust into five family trusts triggers no tax
A family asked the IRS how dividing one irrevocable trust into five separate trusts, one for each branch of the family, would be taxed. The original trust was created before the generation-skipping tr…
Pro rata division into five family trusts produced no income, estate, gift, or GST tax
A trust created before September 25, 1985, benefited one grandchild and that grandchild's descendants. Because the five children had different circumstances, the trustees obtained court approval to di…
Pro rata division into five family trusts produced no income, estate, gift, or GST tax
A trust created before September 25, 1985, benefited one grandchild and that grandchild's descendants. Because the five children had different circumstances, the trustees obtained court approval to di…
Pro rata division into five family trusts produced no income, estate, gift, or GST tax
A trust created before September 25, 1985, benefited one grandchild and that grandchild's descendants. Because the five children had different circumstances, the trustees obtained court approval to di…
Pro rata division into five family trusts produced no income, estate, gift, or GST tax
A trust created before September 25, 1985, benefited one grandchild and that grandchild's descendants. Because the five children had different circumstances, the trustees obtained court approval to di…
A partnership received retroactive QEF elections for thirteen PFIC funds
A domestic partnership invested across thirteen sub-funds of a foreign umbrella investment company. Its experienced tax adviser had access to the funds' records but failed to identify the sub-funds as…
A partnership received retroactive QEF elections for twenty-one PFIC funds
A domestic partnership invested in twenty-one sub-funds of a foreign umbrella investment company over two years. Its experienced tax adviser had access to the relevant records but failed to identify t…
Tax-free two-step spin-off separating a business line and pushing it up to a foreign parent
A domestic corporate group, ultimately owned by a foreign parent through a chain of disregarded entities, wanted to separate one of its two active businesses (Business B) from the other (Business A). …
IRS grants extra time for a partnership to make a section 1045 rollover election on qualified small business stock
A partnership sold qualified small business (QSB) stock and reinvested the proceeds in replacement QSB stock, intending to defer the gain by electing section 1045 rollover treatment. Section 1045 lets…
A parent's separation of one subsidiary's four businesses into three newly spun-off corporations qualifies as tax-free "D" reorganizations and section 355 distributions
A publicly traded parent company owns a subsidiary ("Sub 1") that runs four distinct businesses through a web of lower-tier corporations and disregarded entities. To split those businesses apart, Sub …
Investor whose late K-1s pushed the return past its deadline gets 60 more days to make a section 1045 election deferring gain on small-business stock
Section 1045 lets an investor who sells "qualified small business stock" (QSBS) held more than six months roll the gain into new QSBS bought within 60 days, deferring tax on the sale. The election tha…
IRS consents to revoke a mark-to-market election on a foreign fund so the investor can switch to a QEF election
A U.S. investment partnership held stock in a foreign company that is a passive foreign investment company (PFIC). A U.S. owner of PFIC stock generally must choose a tax regime for it, and two common …
Court-ordered restructuring of long-term care policies in an insurer rehabilitation is not a taxable event for policyholders
A state-domiciled life insurance company that sold guaranteed-renewable long-term care policies was placed into rehabilitation by a state court because its projected liabilities far exceeded its asset…
Consent to make a late retroactive QEF election for a PFIC investment
A U.S. investor (a domestic trust) held stock in a foreign corporation that was a passive foreign investment company (PFIC). U.S. shareholders of a PFIC can elect to treat it as a "qualified electing …
Pre-1942 trust keeps its GST-exempt status through a court construction and modification, and beneficiary disclaimers stay tax-free
An old family trust, created before October 21, 1942 and still irrevocable long before the generation-skipping transfer (GST) tax took effect, asked the IRS to bless a set of proposed changes without …
Pre-1942 trust keeps its GST-exempt status through a court construction and modification, and beneficiary disclaimers stay tax-free
An old family trust, created before October 21, 1942 and still irrevocable long before the generation-skipping transfer (GST) tax took effect, asked the IRS to bless a set of proposed changes without …
Pre-1942 trust keeps its GST-exempt status through a court construction and modification, and beneficiary disclaimers stay tax-free
An old family trust, created before October 21, 1942 and still irrevocable long before the generation-skipping transfer (GST) tax took effect, asked the IRS to bless a set of proposed changes without …
Pre-1942 trust keeps its GST-exempt status through a court construction and modification, and beneficiary disclaimers stay tax-free
An old family trust, created before October 21, 1942 and still irrevocable long before the generation-skipping transfer (GST) tax took effect, asked the IRS to bless a set of proposed changes without …
Pre-1942 trust keeps its GST-exempt status through a court construction and modification, and beneficiary disclaimers stay tax-free
An old family trust, created before October 21, 1942 and still irrevocable long before the generation-skipping transfer (GST) tax took effect, asked the IRS to bless a set of proposed changes without …
What these documents are
- Private letter rulings (PLRs): A taxpayer asked the IRS to rule on a planned transaction before doing it. The ruling shows exactly how the IRS applied the Code to those facts.
- Technical advice memoranda (TAMs): The IRS National Office answering a question raised during an audit or other proceeding.
- Chief Counsel advice (CCAs): IRS lawyers advising their own field staff on how to apply the law.
- Determination letters: Rulings on exempt-organization matters, such as whether an organization qualifies under § 501(c)(3) or a foundation's grant procedures pass § 4945.
- Not precedent, still useful: Under 26 U.S.C. § 6110(k)(3) none of these can be cited as precedent. They remain the best public window into how the IRS actually rules on facts like yours, and practitioners read them for exactly that.