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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IRS rules a combined universal-life policy and its annuity rider are separate contracts for tax purposes
A life insurance company plans to sell a single product that bundles a universal life insurance policy (the "Base Contract") with a single-premium immediate annuity attached as a rider (the "Annuity R…
IRS rules a combined universal-life policy and its annuity rider are separate contracts for tax purposes
A life insurance company plans to sell a single product that bundles a universal life insurance policy (the "Base Contract") with a single-premium immediate annuity attached as a rider (the "Annuity R…
Permission to revoke an inadvertent election out of the installment method (§ 453(d))
A married couple sold their business and a separately owned asset, taking part of the price for that asset as an installment note payable over several years. Normally the installment method lets a sel…
Modifying a pre-1985 grandfathered trust without losing GST exemption or triggering gift, estate, or income tax
A family trust was created under the will of someone who died before September 25, 1985. That timing makes the trust "grandfathered" and exempt from the generation-skipping transfer (GST) tax, so long…
Transitory, insignificant momentary ownership of S-corp stock by an ineligible shareholder under the equity-compensation regulations does not terminate the S elections
An S corporation loses its S status if it ever has an ineligible shareholder, such as a partnership. Here, two S corporations (Y and Z) ran equity compensation plans that let employees of a related bu…
Section 1059A does not cap import basis at the customs value derived under the deductive value method
A U.S. corporation owned by a foreign parent imports finished goods that the parent manufactures abroad and resells them to unrelated U.S. buyers. Section 1059A stops importers from claiming a higher …
IRS consents to a retroactive QEF election after the taxpayer's accountant failed to flag a foreign holding as a PFIC
A U.S. taxpayer owned shares in a foreign corporation. That corporation was a "passive foreign investment company" (PFIC), a category of foreign holding that carries harsh U.S. tax rules unless the sh…
IRS permits retroactive QEF elections for two foreign investments
A U.S. taxpayer invested in two foreign corporations, partly through a foreign grantor trust, but her tax professional failed to identify the companies as passive foreign investment companies or advis…
Mortgage certificate exchange interests qualify as stripped bonds and preserve fixed-trust status
A mortgage-securities sponsor proposed supplemental exchange trusts that accept one class of REMIC or grantor-trust certificates and issue multiple exchange-certificate classes with different principa…
Investors could make a retroactive QEF election beginning in the third year
A married couple held shares in a foreign corporation that their longtime tax preparer failed to identify as a passive foreign investment company. As a result, the preparer did not advise them to make…
Taxpayer may make a retroactive qualified electing fund election
A taxpayer asked for permission to make a qualified electing fund election retroactive to the year he first invested in a foreign corporation. Two tax professionals failed to identify the corporation …
Reverse improvement exchange qualified for section 1031 safe harbors
A real estate partnership proposed exchanging rental property for a leasehold of more than 30 years plus improvements to be built on land owned by a related partnership. An exchange accommodation titl…
S corporation may revoke an unintended installment-sale opt-out
Four shareholders sold all the stock of an S corporation, and the buyer later requested a § 338(h)(10) election that treated the deal as an asset sale for tax purposes. The taxpayer told its accountin…
Early trust termination avoided transfer taxes but triggered capital gain
A pre-September 25, 1985 irrevocable trust paid a fixed annuity to a grandchild and would ultimately pass to the grandchild’s descendants. The adult and minor beneficiaries, represented as necessary, …
Foreign futures exchange is a "qualified board or exchange" for section 1256 mark-to-market treatment
Certain futures and similar contracts get special tax treatment under section 1256: they are treated as if sold at year end (mark-to-market), with gains and losses split 60% long-term and 40% short-te…
Fleeting stock ownership by ineligible holders under an equity-comp plan does not blow the company's S election
An S corporation can lose its special tax status if it ever has a shareholder who is not allowed to own S corporation stock (for example, another corporation or certain entities). This company runs eq…
Dividing a marital QTIP trust and disclaiming half is tax-free income-wise and produces a controlled gift, with no surprise estate inclusion
A surviving spouse was the lifetime income beneficiary of a "QTIP" marital trust (property that qualified for the estate tax marital deduction when the first spouse died and that will normally be taxe…
Dividing a marital QTIP trust and disclaiming half is tax-free income-wise and produces a controlled gift, with no surprise estate inclusion
A surviving spouse was the lifetime income beneficiary of a "QTIP" marital trust (property that qualified for the estate tax marital deduction when the first spouse died and that will normally be taxe…
A contingent deferred annuity linked to a taxpayer's own brokerage account is treated as an annuity under Section 72, with no straddle or loss-deferral side effects
A life insurance company plans to sell a "contingent deferred annuity," a product that guarantees a person lifetime income if their own investment account ever runs dry. Unlike a normal annuity, the b…
Foreign electronic derivatives exchange recognized as a "qualified board or exchange" under section 1256
A foreign, all-electronic derivatives exchange asked the IRS to confirm it is a "qualified board or exchange" under section 1256(g)(7)(C). That status matters because futures contracts traded on such …
A fifth beneficiary of the same terminating trust gets the same favorable like-kind exchange ruling
This is another companion ruling in the same set as PLR 202450005 through PLR 202450008 (file reference PLR-105751-24), addressing a further beneficiary of one testamentary trust. The trust held undev…
A fourth beneficiary of the same terminating trust gets the same favorable like-kind exchange ruling
This is another companion ruling in the same set as PLR 202450005 through PLR 202450007 (file reference PLR-105750-24), addressing a further beneficiary of one testamentary trust. The trust held undev…
A third beneficiary of the same terminating trust gets the same favorable like-kind exchange ruling
This is another companion ruling in the same set as PLR 202450005 and PLR 202450006 (file reference PLR-105748-24), addressing a further beneficiary of one testamentary trust. The trust held undevelop…
A second beneficiary of the same terminating trust also gets a favorable like-kind exchange ruling
This is a companion ruling to PLR 202450005 (file reference PLR-105747-24), addressing a second beneficiary of the same testamentary trust. The trust held undeveloped land for investment and ended aut…
A beneficiary who receives land from a terminating trust can still use it in a like-kind exchange
A testamentary trust held undeveloped land as an investment for many years. The trust was set to end automatically when the last surviving daughter of the person who created it died, and that death (t…
Nuclear facility sale qualifies as an applicable asset acquisition
A seller proposed transferring a shut-down nuclear facility, related assets, and a decommissioning trust to a purchaser that would assume the nuclear decommissioning liability. The purchaser would bec…
Nuclear facility sale qualifies as an applicable asset acquisition
A seller proposed transferring a shut-down nuclear facility, related assets, and a decommissioning trust to a purchaser that would assume the nuclear decommissioning liability. The purchaser would bec…
Mandatory trust distribution does not defeat section 1031 holding purpose
A testamentary trust held undeveloped real estate for investment and began negotiating a sale as part of a planned like-kind exchange. Before a contract was signed, the trust's governing termination e…
Joint filers receive 30 days to make late mixed straddle account elections
An individual and spouse requested permission to make late mixed straddle account elections for four tax years. The individual had traded exchange-traded options, offsetting positions, and section 125…
Mortgage certificate exchange trust retains fixed investment trust status
A taxpayer proposed exchange trusts that would hold one class of mortgage-backed certificates and issue multiple classes of exchange certificates with different rights to principal and interest. Certi…
Longevity contract qualifies as an annuity while the linked brokerage account remains separate
A taxpayer proposed buying a life insurance company's longevity contract linked to a separately owned taxable investment account. The contract would support lifetime withdrawals and begin guarantee pa…
Consent to make a retroactive QEF election for a PFIC investment
A married couple who file a joint U.S. return owned a small stake (under 10 percent) in a foreign corporation. That company later became a "passive foreign investment company" (PFIC), a status that su…
Descendant trust modifications preserve tax treatment
A trust created before September 25, 1985, had already been divided into separate trusts for two grandchildren. A state court approved further changes to one grandchild's trust, including retaining di…
Descendant trust modifications preserve tax treatment
A trust created before September 25, 1985, had already been divided into separate trusts for two grandchildren. A state court approved further changes to one grandchild's trust, including retaining di…
Retroactive QEF election allowed for undisclosed foreign company
A domestic partnership indirectly owned a minority interest in a foreign corporation through a foreign partnership. The foreign partnership's management did not tell the taxpayer that it had formed th…
60-day extension for a fund to make a late mark-to-market election on PFIC stock
U.S. investors in a passive foreign investment company (PFIC) can elect, under Section 1296, to "mark to market" their shares, meaning they report the annual change in value instead of facing the hars…
Shareholder received consent for a retroactive QEF election
A United States shareholder owned less than 10 percent of a foreign corporation that later became a passive foreign investment company. The shareholder's qualified tax adviser did not timely identify …
Shareholder received consent for a retroactive QEF election
A United States shareholder owned less than 10 percent of a foreign corporation that became a passive foreign investment company. The shareholder's qualified tax adviser did not identify the PFIC stat…
Investment company allowed to revoke PFIC mark-to-market election
A regulated investment company made a mark-to-market election for stock in a passive foreign investment company because it did not know the foreign company would provide annual PFIC information statem…
Investor received consent for a retroactive QEF election
A United States taxpayer owned less than 10 percent of a foreign company that later became a passive foreign investment company. The taxpayer's qualified adviser did not identify the company's PFIC st…
Investor received consent for a retroactive QEF election
A United States taxpayer owned less than 10 percent of a foreign company that later became a passive foreign investment company. The taxpayer's qualified adviser did not identify the company's PFIC st…
Investor may make a retroactive qualified electing fund election
A U.S. taxpayer owned less than 10 percent of a foreign company that later became a passive foreign investment company. The taxpayer's longtime tax adviser did not identify the company's PFIC status o…
Investor may make a retroactive qualified electing fund election
A U.S. taxpayer owned less than 10 percent of a foreign company that later became a passive foreign investment company. The taxpayer's longtime tax adviser did not identify the company's PFIC status o…
Investor may make a retroactive qualified electing fund election
A U.S. taxpayer owned less than 10 percent of a foreign company that later became a passive foreign investment company. The taxpayer's longtime tax adviser did not identify the company's PFIC status o…
Investor may make a retroactive qualified electing fund election
A U.S. taxpayer owned less than 10 percent of a foreign company that later became a passive foreign investment company. The taxpayer's longtime tax adviser did not identify the company's PFIC status o…
Investor may make a retroactive qualified electing fund election
A U.S. taxpayer owned less than 10 percent of a foreign company that later became a passive foreign investment company. The taxpayer's longtime tax adviser did not identify the company's PFIC status o…
Taxpayers received 60 days to make a late qualified-stock rollover election
One spouse sold shares of a company the spouse had co-founded and invested part of the proceeds in another company within 60 days. The taxpayers intended to elect under Section 1045 to defer gain by r…
REIT's late interest-rate hedge identification was inadvertent
A REIT subsidiary entered into an interest-rate cap required by a floating-rate loan used to acquire or carry real estate. The REIT's accounting firm mistakenly believed that no tax hedge identificati…
REIT's late interest-rate hedge identification was inadvertent
A REIT subsidiary entered into an interest-rate cap required by a floating-rate loan used to acquire or carry real estate. The REIT's accounting firm mistakenly believed that no tax hedge identificati…
REIT's late interest-rate hedge identification was inadvertent
A REIT subsidiary entered into an interest-rate cap required by a floating-rate loan used to acquire or carry real estate. The REIT's accounting firm mistakenly believed that no tax hedge identificati…
REIT's late interest-rate hedge identification was inadvertent
A REIT subsidiary entered into an interest-rate cap required by a floating-rate loan used to acquire or carry real estate. The REIT's accounting firm mistakenly believed that no tax hedge identificati…
REIT's late interest-rate hedge identification was inadvertent
A REIT subsidiary entered into an interest-rate cap required by a floating-rate loan used to acquire or carry real estate. The REIT's accounting firm mistakenly believed that no tax hedge identificati…
REIT's late interest-rate hedge identification was inadvertent
A REIT subsidiary entered into an interest-rate cap required by a floating-rate loan used to acquire or carry real estate. The REIT's accounting firm mistakenly believed that no tax hedge identificati…
Shareholder may make a retroactive QEF election for a PFIC
A U.S. shareholder owned less than 10 percent of a foreign company that later became a passive foreign investment company. The shareholder's tax adviser did not identify the company's PFIC status or e…
Testing company was a qualified trade or business for Section 1202
A founder asked whether a company's redacted testing activity was a qualified trade or business for the Section 1202 exclusion for gain on qualified small business stock. The company performed tests o…
Trust termination did not defeat beneficiary's Section 1031 holding purpose
A testamentary trust held real property for investment and began negotiating its disposition before the death that required the trust to terminate. Under a proposed court-approved termination plan, th…
Trading firm received 30 days for late mixed-straddle election
A proprietary trading firm moved a strategy involving offsetting Section 1256 and non-Section 1256 positions from a partnership to its disregarded broker-dealer entity. Although predecessor entities h…
Retroactive QEF election was allowed
A U.S. person owned a minority interest in a foreign corporation that became a passive foreign investment company. The taxpayer relied on a qualified tax adviser who did not identify the corporation's…
Retroactive QEF election was allowed
A U.S. person owned a minority interest in a foreign corporation that became a passive foreign investment company. The taxpayer relied on a qualified tax adviser who did not identify the corporation's…
Investor received permission for a retroactive QEF election
A U.S. taxpayer owned a minority interest in a foreign company that later became a passive foreign investment company. The taxpayer relied on a qualified adviser who did not identify the company's PFI…
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.