Ezel / IRS Rulings / 201112015

CCA 201112015: Notice 94-93 may not control a cash and promissory-note transfer

Number
201112015
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Miscellaneous Issues
Topics
Other topics
Code sections
§ 6110
Ruling dated
January 21, 2010
Publicly released
March 25, 2011
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2011, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2011
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advised that Notice 94-93 did not appear to control a transaction in which shareholders transferred or sold parent stock to a subsidiary solely for promissory notes and cash, without receiving subsidiary stock. The advice also stated that the minority shares appeared to be valued in the same manner as the other shares on the described facts.

Ruling snapshot

  • Question: Does Notice 94-93 control when parent stock is transferred for cash and promissory notes but no subsidiary stock?
  • Outcome: Advice given.
  • Key authorities: Notice 94-93

Full text (IRS public release)

ID: CCA-915255-10 Number: 201112015
Release Date: 3/25/2011
Office: --------------
UILC: 9999.00-00

From: ---------------------
Sent: Thursday, January 21, 2010 2:56 PM
To: -------------------
Cc: ---------------------
Subject: RE: question ---------

Thanks for the shrunken diagram. It printed off nicely.

Doesn't Notice 94-93 only apply where the shareholders of Parent transfer their Parent stock to the wholly or partially owned Sub in exchange for some Sub stock?

In your case, the ------ shares of ------- stock were transferred/sold to ------
--------------------------------------------solely for promissory notes and cash [but no ---------------------------------------------------] [ie, no Sub stock].

Thus, it doesn't appear to me that the Notice should control. And I don't see why we wouldn't value the minority shares the same as the rest of the shares.

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace