2004 Ruling 2004-0080501R3 - Single-wing butterfly

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Standard butterfly

XXXXXXXXXX 2004-008050

XXXXXXXXXX, 2004

Dear XXXXXXXXXX:

Re: XXXXXXXXXX ("Xco")
XXXXXXXXXX ("Yco")
XXXXXXXXXX ("A")
XXXXXXXXXX (the "Estate")
Advance Income Tax Ruling Request

We are writing in response to your letters of XXXXXXXXXX in which you requested an advance income tax ruling on behalf of the above-noted taxpayers. We also acknowledge the information provided in subsequent correspondence and various telephone conversations. You have advised us that to the best of your knowledge and that of the taxpayers involved none of the issues involved in this ruling request are:

(i) in an earlier return of the taxpayers or related persons;

(ii) being considered by a tax services office ("TSO") or taxation centre ("TC") in connection with a previously filed tax return of the taxpayers or related persons;

(iii) under objection by the taxpayers or related persons;

(iv) before the courts or, if a judgment has been issued, the time limit for appeal to a higher court has expired; or

(v) the subject of a ruling previously issued by the Income Tax Rulings Directorate.

DEFINITIONS

In this letter, unless otherwise specified, all monetary amounts are expressed in Canadian dollars and the following terms have the meanings specified:

(a) "Act" means the Income Tax Act (Canada), R.S.C. 1985 (5th Supp.) c.1, as amended from time to time and consolidated to the date of this letter and, unless otherwise expressly stated, every reference herein to a part, section or subsection, paragraph or subparagraph and clause or subclause is a reference to the relevant provision of the Act;

(b) "adjusted cost base" ("ACB") has the meaning assigned by section 54 and subsection 248(1);

(c) "agreed amount" means the amount that the taxpayer and the corporation have jointly elected in prescribed form in respect of an eligible property;

(d) "BCA" means the XXXXXXXXXX Business Corporations Act;

(e) "Canadian-controlled private corporation"("CCPC") has the meaning assigned by subsection 125(7);

(f) "capital dividend account" ("CDA") has the meaning assigned by subsection 89(1);

(g) "capital property" has the meaning assigned by section 54;

(h) "cost amount" has the meaning assigned by subsection 248(1);

(i) "DC" means the corporation resulting from the amalgamation of Xco and Yco as described in paragraph 16 below;

(j) "depreciable property" has the meaning assigned by subsection 13(21);

(k) "disposition" has the meaning assigned by subsection 248(1);

(l) "distribution" has the meaning assigned by subsection 55(1);

(m) "dividend refund" has the meaning assigned by subsection 129(1);

(n) "eligible capital property" has the meaning assigned by section 54;

(o) "eligible property" has the meaning assigned by subsection 85(1.1);

(p) "fair market value" ("FMV") means the highest price available in an open and unrestricted market, between informed, prudent parties, acting at arm's length and under no compulsion to act, expressed in terms of cash;

(q) "paid-up capital" ("PUC") has the meaning assigned by subsection 89(1);

(r) "predecessor corporation(s)" means the corporations that amalgamate to form DC as described in paragraph 16 below;

(s) "private corporation" has the meaning assigned by subsection 89(1);

(t) "private holding corporation" has the meaning assigned by subsection 191(1);

(u) "proceeds of disposition" has the meaning assigned by section 54;

(v) "refundable dividend tax on hand" ("RDTOH") has the meaning assigned by subsection 129(3);

(w) "related persons" has the meaning assigned by section 251;

(x) "restricted financial institution" has the meaning assigned by subsection 248(1);

(y) "series of transactions or events" includes the related transactions or events referred to in subsection 248(10);

(z) "short-term preferred share" has the meaning assigned by subsection 248(1);

(aa) "specified financial institution" ("SFI") has the meaning assigned by subsection 248(1);

(bb) "specified investment business" has the meaning assigned by subsection 125(7);

(cc) "stated capital" has the meaning assigned by the BCA;

(dd) "taxable Canadian corporation" has the meaning assigned by subsection 89(1);

(ee) "taxable dividend" has the meaning assigned by subsection 89(1);

(ff) "taxable preferred share" has the meaning assigned by subsection 248(1); and

(gg) "US Sub" means XXXXXXXXXX.

FACTS

1. Xco is a CCPC and a taxable Canadian corporation. Xco was formed on XXXXXXXXXX under the provisions of the BCA by an amalgamation of a predecessor corporation, XXXXXXXXXX, and its subsidiary wholly-owned corporation (as defined in subsection 87(1.4) of the Act), XXXXXXXXXX. The head office of Xco is located at XXXXXXXXXX. It files its income tax returns in the XXXXXXXXXX TC and deals with the XXXXXXXXXX TSO. Xco has a taxation year end of XXXXXXXXXX.

2. Xco's only undertaking is the investment of its funds. Xco primarily owns marketable securities consisting of publicly traded Canadian and U.S. stocks, bonds and other financial instruments and cash. Xco's cash at any point in time represents the proceeds of dividends and interest received or the proceeds from the sale of securities, which are continually being reinvested in new securities. The income of Xco is reported as income from a specified investment business. The marketable securities held by Xco are capital property to it.

3. Xco also holds all of the issued and outstanding shares of US Sub. The shares of US Sub are capital property to Xco. US Sub is a United States corporation and a resident of the United States. Currently, US Sub does not carry on active business in the United States and the only significant assets of the US Sub is amounts owing from affiliated corporations (including Xco) to the US Sub in the amount of $US XXXXXXXXXX.

4. The liabilities of Xco include a shareholder loan owed in equal proportion to its shareholders, amounts due to affiliated corporations, and amounts due to US Sub (the "Xco Note"). Other liabilities include income tax liabilities and accrued professional fees, which result from the ongoing operations of Xco.

5. The aggregate FMV as at XXXXXXXXXX of Xco's assets (before deducting liabilities) was approximately $XXXXXXXXXX and the aggregate ACB of such assets was approximately $XXXXXXXXXX.

6. Yco is a CCPC and a taxable Canadian corporation. Yco was incorporated on XXXXXXXXXX under the provisions of the XXXXXXXXXX Business Corporations Act. The head office of Yco is located at XXXXXXXXXX. It files its income tax returns in the XXXXXXXXXX TC and deals with the XXXXXXXXXX TSO. Yco has a taxation year end of XXXXXXXXXX. Yco's only undertaking is the investment of its funds. Yco's activities are a specified investment business. The only significant asset of Yco is an advance to Xco in the amount of $XXXXXXXXXX.

7. The Estate is a trust with XXXXXXXXXX trustees (the "Trustees"), consisting of A and XXXXXXXXXX. individuals at arm's length to each other, A and the beneficiaries of the Estate. The majority decision of the Trustees binds the Estate. A is an income beneficiary of the Estate.

8. The authorized share capital of Xco consists of:

- XXXXXXXXXX voting Class A Common Shares;
- XXXXXXXXXX non-voting Class B Common Shares;
- XXXXXXXXXX non-voting Preference Shares.

The Preference Shares are redeemable and retractable at $XXXXXXXXXX per share. The Preference Shares are entitled to dividends at the discretion of the Board of Directors and rank equally with the Class A Common and Class B Common Shares as to the right to dividends.

9. The issued share capital of Xco consists of XXXXXXXXXX Class A Common Shares with an aggregate PUC of $XXXXXXXXXX and XXXXXXXXXX Preference Shares with an aggregate PUC of $XXXXXXXXXX. The ownership of the shares of Xco is divided as follows:

Class A Common Preference
Estate XXXXXXXX XXXXXXXXX
A XXXXXXXX XXXXXXXXX
All of the shares of Xco represent capital property to the shareholders.

10. The authorized share capital of Yco consists of:

- an unlimited number of Class D voting Common Shares;
- an unlimited number of Class A non-voting Preferred Shares;
- an unlimited number of Class B non-voting Preferred Shares;
- an unlimited number of Class C non-voting Preferred Shares..

The Class A Preferred Shares redeemable and retractable at $XXXXXXXXXX per share. The Class A, Class B and Class C Preferred Shares bear a non-cumulative dividend entitlement of XXXXXXXXXX% of the redemption amount and rank before the Class D Common Shares with respect to the payment of dividends.

11. The issued share capital of Yco consists of XXXXXXXXXX Class D Common Shares with an aggregate PUC of $XXXXXXXXXX and XXXXXXXXXX Class A Preferred Shares with an aggregate PUC of $XXXXXXXXXX. The ownership of the shares of Yco is divided as follows:

Class D Common Class A
Estate XXXXXXXX XXXXXXXX
A XXXXXXXX XXXXXXXX

All of the shares of Yco represent capital property to its shareholders.

12. The Estate controls Xco through its ownership of the Class A Common Shares of Xco. The Estate controls Yco through its ownership of the Class D Common Shares of Yco.

13. As at XXXXXXXXXX the balance in Xco's RDTOH account amounted to approximately $XXXXXXXXXX. Xco will earn investment income and realize capital gains in the period from XXXXXXXXXX to the date of distribution that will result in additional RDTOH. This amount is not determinable at this time. As at XXXXXXXXXX, Xco had nominal balance in its CDA.

14. Yco does not have any RDTOH and will not have any such amount at the end of the taxation year in which the proposed transactions are completed. Yco has a nominal balance in its CDA.

15. None of the Xco or Yco shares owned by the shareholders were acquired in contemplation of the proposed transactions described below.

PROPOSED TRANSACTIONS

16. US Sub will be wound-up into Xco. Immediately prior to the wind-up Xco will repay the Xco Note with cash. On the wind-up of Xco all of the property of US Sub will be distributed to Xco and the shares of US Sub held by Xco will be cancelled. Yco will continue from the XXXXXXXXXX jurisdiction to the XXXXXXXXXX jurisdiction and, under the applicable provisions of the BCA, will be amalgamated with Xco to form a new corporate entity, DC, such that:

(a) all of the property (except amounts receivable from any predecessor corporation or shares of the capital stock of any predecessor corporation) of Xco and Yco immediately before the amalgamation will become property of DC by virtue of the amalgamation;
(b) all of the liabilities (except amounts payable to any predecessor corporation) of Xco and Yco will become liabilities of DC by virtue of the amalgamation; and
(c) all of the shareholders (except any predecessor corporation), who owned shares of the capital stock of any predecessor corporation immediately before the merger, will receive shares of the capital stock of DC because of the amalgamation.

Accordingly, the aggregate FMV of the DC shares issued and outstanding immediately after the amalgamation will be equal to the aggregate FMV of all the shares of Xco and Yco that were issued and outstanding immediately before the amalgamation. DC will be a taxable Canadian corporation and a CCPC.

17. The authorized capital of DC will include an unlimited number of voting Common Shares and an unlimited number of non-voting Preferred Shares, redeemable at $XXXXXXXXXX per share, being the amount paid-up thereon.

18. Upon the amalgamation, DC will issue shares as follows:

						Common 	         Preferred

Estate XXXXXXXXX XXXXXXXXX
A XXXXXXXXX XXXXXXXXX

19. The stated capital and paid-up capital attributable to each of the issued shares described above will be $XXXXXXXXXX per Common Share and $XXXXXXXXXX per Preferred Share. The amalgamation agreement will specify that the preferred shares of each of the predecessor corporations (the Preference Shares of Xco and the Class A Preferred Shares of Yco) are to be converted into the Preferred Shares of DC and the common shares of each of the predecessor corporations (the Class A Common Shares of Xco and the Class D Common Shares of Yco) are to be converted into Common Shares of DC. For greater certainty, the Preferred Shares of DC will not be convertible or exchangeable nor will any holder be entitled to receive on the redemption, cancellation or acquisition of such shares an amount greater than the total of the FMV of the consideration for which such shares were issued. Each holder of a class of shares issued by DC on the amalgamation will hold such shares as capital property.

20. A will incorporate a new company ("Transferee") under the BCA. Transferee will be a taxable Canadian corporation and a private corporation. The only undertaking of Transferee will be the investing of its funds. The authorized share capital of Transferee will be:

- an unlimited number of voting Common Shares;
- an unlimited number of non-voting Class A Special Shares; and
- an unlimited number of voting Class B Special Shares.

The holders of the Common Shares and the Class B Special Shares will be entitled to one vote per share and the holders of the Common shares will be entitled to receive the remaining property of Transferee upon dissolution.

The Class A Special Shares will entitle the holder to a non-cumulative annual dividend not to exceed $XXXXXXXXXX per share to be paid at the discretion of the directors, redeemable and retractable at a redemption price of $XXXXXXXXXX per share (being the consideration for which they are issued) (these shares will mirror the Preferred Shares issued by DC).
The Class B Special Shares will entitle the holder to a non-cumulative annual dividend to be paid at the discretion of the directors, redeemable and retractable at a redemption price of $XXXXXXXXXX per share (being the consideration for which they are issued).

21. A will transfer all of her shares in DC, being XXXXXXXXXX Common Shares and XXXXXXXXXX Preferred Shares, to Transferee. As sole consideration for such transfer, Transferee will issue to A XXXXXXXXXX Common Shares and XXXXXXXXXX Class A Special Shares of Transferee having an aggregate FMV equal to the FMV of the shares of DC transferred by A to Transferee.
A and Transferee will jointly elect, in prescribed form and within the time limits referred to in subsection 85(6), to have the rules in subsection 85(1) apply to the transfers. The agreed amount in each election will be equal to the lesser of the amounts described in subparagraphs 85(1)(c.1)(i)and (ii).
Transferee will add to the stated capital accounts maintained for its Common Shares and Class A Special Shares an amount equal to aggregate PUC, immediately before the transfer, attributable to each of the Common Shares and Preferred Shares, respectively, of DC transferred to Transferee by A. The PUC addition will amount to $XXXXXXXXXX per Common Share and $XXXXXXXXXX per Class A Special Share.

22. Immediately before the transfers of property described in paragraph 23 below, the property owned by DC will be classified into the following three types of property for the purposes of the definition of "distribution" in subsection 55(1) and paragraph 55(3)(b):

(a) cash or near-cash property of DC including cash, bank deposits, term deposits, marketable securities and similar instruments (other than marketable securities and similar investments held as portfolio investments);

(b) investment property, comprising all of the assets of DC, other than any cash or near-cash property, any income from which would, for purposes of the Act, be income from property or from a specified investment business; and

(c) business property, comprising all of the assets, other than cash or near-cash property, any income of which would, for purposes of the Act, be income from a business (other than a specified investment business).

For greater certainty, any tax accounts will not be considered property for purposes of the proposed transactions described herein.

23. Immediately following the classification of DC's property as described in paragraph 22 above, DC will transfer to Transferee a pro rata portion of each type of property owned by DC at that time, as determined in accordance with paragraph 22 above, on a gross FMV basis, such that immediately following such transfers the FMV of each particular type of property so received by Transferee will be equal to or will approximate that proportion of the FMV of that particular type of property of DC immediately before the transfers of property described herein that:

(a) the aggregate FMV, immediately before the transfers, of all of the shares of DC owned by Transferee at that time
is of

(b) the aggregate FMV, immediately before the transfers, of all the issued and outstanding shares of DC at that time(that proportion is hereinafter referred to as the "DC split-up proportion").

For the purpose of this paragraph, the expression "approximate that proportion" means that the discrepancy from that proportion, if any, would not exceed XXXXXXXXXX %, determined as a percentage of the FMV of each type of property which Transferee has received as compared to what the Transferee would have received had it received its appropriate pro rata share of the FMV of that type of property.

24. As consideration for the property transferred by DC to Transferee, as described in paragraph 23 above, Transferee will:

(a) assume the liabilities of DC which will be equal to the DC split-up proportion of all the liabilities of DC immediately before the transfer described in paragraph 23 above; and

(b) issue to DC Class B Special Shares having an aggregate FMV and redemption amount equal to the amount by which the aggregate FMV of the property transferred to Transferee exceeds the amount of the liabilities assumed by Transferee as described in (a) above.

25. In respect of the transfers described in paragraph 23 above, DC and Transferee will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the rules in subsection 85(1) apply to the transfer of each property transferred by DC to Transferee that is an eligible property. The agreed amount in each such election in respect of a particular eligible property so transferred will not be less than:

(a) in the case of capital property (other than depreciable property of a prescribed class), an amount equal to the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii);

(b) in the case of depreciable property of a prescribed class, an amount equal to the least of the amounts described in subparagraphs 85(1)(e)(i), (ii) and (iii); and

(c) in the case of eligible capital property, an amount equal to the least of the amounts described in subparagraphs 85(1)(d)(i), (ii) and (iii).

In each case, the agreed amount will not exceed the FMV of the respective property, nor will it be less than the amount of any liabilities assumed by Transferee as consideration for the transfer of such property.

26. Transferee will add to the stated capital account maintained for its Class B Special Shares an amount not exceeding the cost to Transferee (as determined under section 85, where relevant) of the property transferred less any liabilities it assumes.

27. Transferee will then redeem all of its Class B Special Shares held by DC for their aggregate redemption amount which, for greater certainty, will equal the aggregate FMV of such shares. As payment of the redemption amount, Transferee will issue to DC a demand promissory note (the "Transferee Note") having a principal amount and FMV equal to the redemption amount of the Class B Special Shares so redeemed. DC will accept the Transferee Note as full payment of the redemption amount of the Class B Special Shares. At the end of the day on which the Class B Special Shares of Transferee are redeemed, Transferee will cause its first fiscal and taxation year to end.

28. On the day following the redemption of the Class B Special Shares of Transferee described in paragraph 27 above, DC will purchase for cancellation and redeem all of the DC Common Shares and Preferred Shares owned by Transferee for FMV consideration. DC will pay the purchase price and the redemption price for such shares by issuing to Transferee a demand promissory note (the "DC Note") having a principal amount and FMV equal to the aggregate FMV of the shares so purchased and redeemed. Transferee will accept the DC Note as full payment of the purchase price and redemption price of the shares.

29. The Transferee Note and the DC Note will be set off against one another and cancelled in full satisfaction of Transferee's and DC's mutual debt obligations.

PURPOSE OF PROPOSED TRANSACTIONS

30. The purpose of the proposed transactions is to transfer to Transferee a portion of the assets held by DC and to permit the individual shareholders to determine the future investment policies of the corporations controlled by them independently.

ADDITIONAL INFORMATION

31. Except as described herein, no property has been or will be acquired or disposed of by DC and no liabilities have been or will be incurred by DC in contemplation of or subsequent to the proposed transactions.

32. None of the proposed transactions will have any impact on outstanding tax liabilities, if any, of any of the taxpayers referred to in this ruling request.

33. None of the shares of DC or Transferee will be at any time during the implementation of the proposed transactions described herein:

(a) the subject of any undertaking or agreement that is referred to in subsection 112(2.2) as a "guarantee agreement";

(b) issued or acquired as part of a transaction, event or series of transactions or events of the type described in subsection 112(2.5); or

(c) the subject of a "dividend rental arrangement" as that term is defined in subsection 248(1).

34. None of DC and Transferee is or will be a specified financial institution or a restricted financial institution at any time before the completion of the proposed transactions. None of DC and Transferee is or will not, at any time before the completion of the proposed transactions, be a corporation described in any of paragraphs (a) to (f) of the definition of "financial intermediary corporation" in subsection 191(1) of the Act.

35. DC is a private holding corporation and Transferee will be a private holding corporation.

36. Each of DC and Transferee will have the financial capacity to honour, upon presentation for payment, the amount payable under the DC Note and Transferee Note issued by them as part of the proposed transactions.

RULINGS

Provided that the preceding statements constitute a complete and accurate disclosure of all of the relevant facts, proposed transactions and purpose of the proposed transactions, and provided that the proposed transactions are completed in the manner described above, our rulings are as follows:

A. Subsection 85(1) will apply to the transfer by A of her shares of DC to Transferee, as described in paragraph 21, in respect of which an election under subsection 85(1) will be made. The agreed amount in respect of each transfer will be deemed to be the A's proceeds of disposition and Transferee's cost thereof pursuant to paragraph 85(1)(a). For greater certainty, paragraph 85(1)(e.2) will not apply to the transfer.

B. Subject to the application of subsection 69(11), subsection 85(1) will apply to the transfer of each eligible property by DC to Transferee as described in paragraph 23, in respect of which an election under subsection 85(1) is made, such that the agreed amount in respect of each transfer of each eligible property will be deemed to be DC's proceeds of disposition and Transferee's cost thereof pursuant to paragraph 85(1)(a). For greater certainty, paragraph 85(1)(e.2) will not apply to the transfers.

C. On the redemption by Transferee of its Class B Special Shares held by DC, described in paragraph 27 above, and on the purchase for cancellation and redemption by DC of its Common Shares and Preferred Shares held by Transferee, as described in paragraph 28 above:

(a) by virtue of subsection 84(3):

(i) Transferee will be deemed to have paid, and DC will be deemed to have received, a taxable dividend at that time equal to the amount, if any, by which the amount paid to redeem the Class B Special Shares exceeds the PUC of those shares immediately before the redemption; and

(ii) DC will be deemed to have paid, and Transferee will be deemed to have received, a taxable dividend at that time equal to the amount, if any, by which the amount paid in respect of the purchase for cancellation of the Common Shares and the redemption of the Preferred Shares exceeds the PUC of those shares immediately before the purchase or the redemption, as the case may be;

(b) the taxable dividends deemed to have been received by each of Transferee and DC as described in (a) above:

(i) will be included in the particular recipient's income pursuant to section 82 and paragraph 12(1)(j);

(ii) will be excluded from the proceeds of disposition of the shares so redeemed or purchased for cancellation by virtue of paragraph (j) of the definition of "proceeds of disposition"; and

(iii) will be deductible in computing the taxable income of the particular recipient for the year in which the dividend is deemed to have been received pursuant to subsection 112(1) and such deduction will not be denied by any of the provisions of subsections 112(2.1), (2.2), (2.3) or (2.4);

(c) provided that each of DC and Transferee is not entitled to a dividend refund in respect of its taxation year in which it is deemed to pay the dividend referred to in (a) above, DC and Transferee will not be subject to Part IV tax under subsection 186(1) in respect of such dividend; and

(d) by virtue of subsection 112(3), any loss arising from the disposition of the shares will be reduced by the amount of the taxable dividends referred to in (a) above, as the case may be.

D. With respect to the taxable dividends described in ruling C. (a) above:

(a) the taxable dividends will not be subject to tax under Part IV.1 on the basis that each such dividend will be an "excepted dividend" by virtue of paragraph (c) of the definition of "excepted dividend" in section 187.1; and

(b) the taxable dividends will not be subject to tax under Part VI.1 on the basis that each such dividend will be an "excluded dividend" by virtue of paragraph 191(1)(b).

E. Provided that, as part of the series of transactions or events that include these proposed transactions, there is not:

(a) a disposition of property in the circumstances described in subparagraph 55(3.1)(b)(i);

(b) an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii);

(c) an acquisition of property in the circumstances described in subparagraph 55(3.1)(b)(iii);

(d) an acquisition of property in the circumstances described in paragraph55(3.1)(c); or(e) an acquisition of property in the circumstances described in paragraph 55(3.1)(d);

which has not been described herein, by virtue of paragraph 55(3)(b), subsection 55(2) will not apply to the taxable dividends referred to in ruling C above and, for greater certainty, subsection 55(3.1) will not apply to deny the exemption under paragraph 55(3)(b).

F. The settlement of the Transferee Note and the DC Note will not give rise to a "forgiven amount" within the meaning of subsection 80(1) or 80.01(1).

G. The provisions of subsections 15(1), 56(2) and 246(1) will not apply to the proposed transactions, in and by themselves.

H. As a result of the proposed transactions described herein, in and by themselves, subsection 245(2) will not be applied to redetermine the tax consequences confirmed in the rulings given.

These rulings are given subject to the limitations and qualifications set out in Information Circular 70-6R5 dated May 17, 2002 and are binding on the Canada Revenue Agency provided that the proposed transactions are completed before XXXXXXXXXX.

COMMENTS

1. Provided that the proposed amendment to subsection 88(3) is enacted substantially in the form proposed in the Legislative Proposals released by the Department of Finance on February 27, 2004, it is our view that on the wind-up of US Sub as described in paragraph 16 above subsection 88(3) will apply to the distribution by US Sub of its property to Xco and the disposition by Xco of its shares of US Sub.

2. Nothing in this ruling should be construed as implying that the Canada Revenue Agency has agreed to or reviewed:

(a) the determination of the adjusted cost base, paid-up capital or FMV of any shares or other property referred to herein; or

(b) any tax consequences relating to the facts and proposed transactions described herein other than those described in the rulings given above.

Yours truly,

XXXXXXXXXX
Section Manager
for Division Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Policy and Planning Branch