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Chief Counsel Advice 1112015 Released March 25, 2011 Advice

CCA 1112015: Notice 94-93 may not control a cash and promissory-note transfer

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This page covers one taxpayer's ruling from 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 resolved one taxpayer's situation on its specific facts, 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.

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