CHECKLIST FOR COMPLETE SUBSIDIARY LIQUIDATION RULING REQUEST UPDATED.

Rev. Proc. 90-52

SECTION 332 CHECKLIST QUESTIONNAIRE

CONTENTS

PART I -- PROCEDURES

SEC. 1. PURPOSE

SEC. 5. GENERAL INSTRUCTIONS TO, AND INFORMATION FOR, TAXPAYERS

SECTION 1. PURPOSE

The purpose of this revenue procedure is to set forth in a checklist questionnaire the information that must be included in a request for a ruling under section 332 of the Internal Revenue Code relating to complete liquidations of controlled subsidiary corporations. This revenue procedure updates and supersedes Rev. Proc. 81-68, 1981-2 C.B. 723.

SEC. 2. BACKGROUND

01 The Internal Revenue Service receives many requests for rulings in which the information relating to the proposed transaction is not sufficient to permit a determination to be made. In those cases, it is necessary to obtain additional information from the taxpayer before the request for a letter ruling can be considered. Obtaining the additional information is time consuming for both Service personnel and taxpayers, delays issuance of the ruling letter, and may result in the taxpayer being required to pay an additional user fee. See Rev. Proc. 90-1, 1990-1 C.B. 356, section 3.18.

02 This checklist will facilitate the filing and processing of requests for rulings under section 332 of the Code by specifying information and representations to be included so that the requests will be as complete as possible when initially filed.

03 Because the information and representations necessary to rule on a particular transaction depend upon all the facts and circumstances, information or representations in addition to those set forth in this revenue procedure may be required.

04 The authority and general procedures of the National Office of the Internal Revenue Service and of the Office of the District Directors of Internal Revenue with respect to the issuance of letter rulings and determination letters are outlined in Rev. Proc. 90-1, or its successor. Note section 3.04 of Rev. Proc. 90-1, as modified by Rev. Proc. 90-17, 1990-1 C.B. 479, dealing with the payment of user fees by taxpayers requesting certain types of Service advice including private letter rulings. See also Rev. Proc. 90-3, 1990-1 C.B. 402, or its successor, relating to areas in which advance rulings generally will not be issued. These revenue procedures along with this checklist revenue procedure are subject to periodic updating by the Service. Therefore, careful attention should be given to ensure usage of the most current procedures.

05 Careful attention to all requirements of these revenue procedures will aid in the timely processing of letter ruling requests.

SEC. 3. CHANGES TO REV. PROC. 81-68

01 Section 1 is modified to indicate that the purpose of the revenue procedure is to update and supersede Rev. Proc. 81-68.

02 Section 2 is modified to state that representations are now required, and to update references to revenue procedures cited.

03 Section 4 is substantially altered. Certain sections have been renumbered, and the taxpayer must now submit standard representations using the precise language specified herein, or submit an explanation why the representations cannot be made in the requested form. To properly reflect applicable changes, some citations to Code sections and to revenue rulings and procedures have been added or deleted. Changes include:

1. Section 4.01(6) now requires taxpayers to submit information concerning any prior ruling requests submitted by the taxpayer (or predecessor) that were withdrawn in which the identical or similar issue was present.

2. Section 4.02(2)(b)(2)(C) of Rev. Proc. 81-68, which primarily dealt with issues under former section 334(b)(3)(C) of the Code, has been deleted.

3. Section 4.02(2)(b)(6) has been added to request certain information regarding the applicability of section 338.

4. Section 5 requests certain general information and now includes a cross reference to the information and statements required for all ruling requests pursuant to Rev. Proc. 90-1, and requires taxpayers to list the specific rulings being requested using the precise language desired in the issued ruling and the authorities supporting the rulings.

5. Section 6 is similar to prior section 5 modified to substitute "Associate Chief Counsel (Technical)" for "Assistant Commissioner (Technical)."

6. Section 7 is similar to prior section 6 modified to state that Rev. Proc. 81-68 is superseded.

SEC. 4. SPECIFIC INFORMATION TO BE INCLUDED IN REQUESTS FOR RULINGS UNDER SECTION 332 OF THE CODE

Each of the items in this section should be specifically dealt with in the letter ruling request. If an item is not applicable, so state and briefly explain why. Standard representations are set forth throughout this section and are highlighted by the word "representation" in boldface type. These representations are of equal importance with the other factual information requested herein. The representations function to ensure that specific statutory and judicial requirements and administrative ruling guidelines are satisfied. Each representation set forth in this section should be submitted in the precise language requested. If a representation cannot be submitted as requested, an explanation must be given. Variations of the language of the representations may delay processing the ruling request and will not be accepted unless reasons satisfactory to the Service are submitted. Submission of the information and representations should follow the format of this revenue procedure as closely as possible, with appropriate descriptive headings. Care must be taken to ensure that all the facts relating to the transaction are submitted.

01 INFORMATION REGARDING THE CORPORATION BEING LIQUIDATED ("SUBSIDIARY" OR "S") AND THE CORPORATION RECEIVING THE LIQUIDATING DISTRIBUTION ("PARENT" OR "P").

1. Provide names, taxpayer identification numbers, and places and dates of incorporation of Subsidiary and Parent. State whether Parent and Subsidiary are domestic or foreign corporations.

2. If a foreign corporation is involved consider whether the issues raised fall primarily within the jurisdiction of the Associate Chief Counsel (International) so that the ruling request should be submitted to the attention of that office (CC:INTL).See, for example, sections 367 and 897 of the Code and the regulations thereunder. See, also, Rev. Proc. 90-19, 1990-1 C.B. 495, and section 2.03 of Rev. Proc. 90-1.

3. Provide brief descriptions of the businesses of Subsidiary and Parent.

4. Identify the District Office that will have audit jurisdiction over the returns of Subsidiary and Parent.

5. State whether to the best knowledge of Parent (referred to below as "taxpayer") and the taxpayer's representatives, if any, the identical issue is in a return of the taxpayer (or in a return for any year of a related taxpayer within the meaning of section 267 of the Code, or of a member of an affiliated group of which the taxpayer is also a member within the meaning of section 1504). If so, the statement must specify whether the issue (1) is being examined by a District Director (2) has been examined and (a) the statutory period of limitation either on assessment or for filing a claim for refund or credit of tax has not expired, or (b) a closing agreement covering the issue or liability has not been entered into by a District Director, (3) is being considered by an Appeals Office in connection with the taxpayer's return for an earlier period, (4) has been considered by an Appeals office and (a) the statutory period of limitation either on assessment or for filing a claim for refund or credit of tax has not expired, or (b) a closing agreement covering the issue or liability has not been entered into by an Appeals Office, or (5) is pending in litigation in a case involving the taxpayer or a related taxpayer.

6. The request also must contain a statement whether, to the best knowledge of the taxpayer and the taxpayer's representatives, if any, the identical or a similar issue has been (i) submitted to the Service by the taxpayer or its predecessors but withdrawn before a ruling was issued, or (ii) ruled on by the Service to the taxpayer or to the taxpayer's predecessor. If so, the statement must specify (i) the date of submission, (ii) the date of withdrawal or issuance, and (iii) details of the Service's consideration of the issue.

7. If, after the request is filed but before a ruling is issued, the taxpayer knows that an examination of the issue by a District Director has been started, the taxpayer must notify the National Office of this action. If a return is filed before a ruling is received from the National Office concerning the issue, a copy of the pending request for ruling must be attached to the return. This alerts the District Office and avoids premature District action on the issue.

02 Description of, and ownership of, stock and securities of Subsidiary.

1. Furnish a complete description of each class of Subsidiary stock outstanding on the date of adoption of the plan of liquidation, setting forth the rights and privileges of each class, including the presence or absence of voting rights, dividend and liquidation preferences or limitations, rights to convert to redeem or acquire additional stock, and whether classified as common or preferred stock. With regard to each class of stock, specifically state whether the stock confers the right to vote for directors, and, also, whether voting rights have been, or will be, suspended, and, if so, under what conditions and for how long. With regard to the voting stock of Subsidiary held by Parent, state whether the right to vote the stock has been, or will be, held by someone other than Parent. If voting stock has been, or will be, exchanged for nonvoting stock, or vice versa, state when this has, or will have, occurred. Also, describe all other outstanding interests (bonds, debentures, notes, warrants, options, etc.) and, taking into account all relevant factors (including those listed in section 385(b) of the Code), briefly explain why each of these items should or should not be considered a stock interest other than preferred stock described in section 1504(a)(4).

2. Ownership of stock prior to distribution.

(a) Set forth the number of shares and the percentage of each class of outstanding stock owned by each minority shareholder of Subsidiary (or, if the minority interest is widely held, describe the minority holding in general terms).

(b) Describe each block of each class of Subsidiary stock held by Parent and provide the date Parent acquired such stock.

(1) If the Subsidiary stock was acquired by exercise of an option, provide full particulars as to the date the option was acquired, the party from whom the option was acquired, and the date the option was exercised.

(2) Describe the transaction (purchase, exchange, etc.) in which the Subsidiary stock was acquired, and the amount and kind of consideration given.

(3) State whether the basis of the stock in the hands of Parent is the same, in whole or in part, as the basis in the hands of the party from whom Parent acquired the stock.

(4) State whether there is any plan or intent to sell or otherwise dispose of any Subsidiary stock prior to the liquidation, or for Subsidiary to issue any additional shares of Subsidiary stock.

(5) Submit one of the following two representations. (i) If Subsidiary has outstanding only a single class of stock, submit the following REPRESENTATION: P, ON THE DATE OF ADOPTION OF THE PLAN OF LIQUIDATION, AND AT ALL TIMES UNTIL THE FINAL LIQUIDATING DISTRIBUTION IS COMPLETED, WILL BE THE OWNER OF AT LEAST 80 PERCENT OF THE SINGLE OUTSTANDING CLASS OF S STOCK. (ii) If Subsidiary has more than one class of stock outstanding, submit the following REPRESENTATION: P, ON THE DATE OF ADOPTION OF THE PLAN OF LIQUIDATION, AND AT ALL TIMES UNTIL THE FINAL LIQUIDATING DISTRIBUTION IS COMPLETED, WILL BE THE OWNER OF AT LEAST 80 PERCENT OF THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF STOCK OF S ENTITLED TO VOTE AND THE OWNER OF AT LEAST 80 PERCENT OF THE TOTAL VALUE OF ALL CLASSES OF STOCK (EXCLUDING NONVOTING STOCK THAT IS LIMITED AND PREFERRED AS TO DIVIDENDS AND OTHERWISE MEETS THE REQUIREMENTS OF SECTION 1504(a)(4) OF THE CODE).

(6) State whether the acquisition of Subsidiary stock by Parent constituted a "qualified stock purchase" (QSP) within the meaning of section 338(d)(3) of the Code, and, if so, whether any elections under section 338 were made with respect to such acquisition.

(A) State whether Parent made a qualified stock purchase of any Subsidiary target affiliate (as defined in section 338(h)(6) of the Code) during the consistency period defined in section 338(h)(4), and, if so, whether Parent made any elections under section 338 with respect to its acquisition of the affiliate stock. See Rev. Proc. 89- 40, 1989-2 C.B. 453.

(B) State whether Parent acquired any asset of Subsidiary or a Subsidiary target affiliate (as defined in section 338(h)(6) of the Code) during the consistency period defined in section 338(h)(4). See section 338(e).

3. Provide information as to prior redemptions.

(a) If shares of Subsidiary stock have been redeemed during the 3 years preceding the adoption of the plan of complete liquidation of Subsidiary, state the number of shares of Subsidiary stock redeemed, the dates of the redemptions, the number of shares of stock of both Subsidiary and Parent owned by the redeemed shareholders at the time of the redemptions, and the property distributed in exchange for the stock.

(b) If no shares of Subsidiary stock will have been redeemed during this 3-year period, submit the following REPRESENTATION: NO SHARES OF S STOCK WILL HAVE BEEN REDEEMED DURING THE 3 YEARS PRECEDING THE ADOPTION OF THE PLAN OF COMPLETE LIQUIDATION OF S.

03 FACTS NECESSARY TO SHOW COMPLETE LIQUIDATION.

1. Specify all dates relevant to determining the date of adoption of the plan of liquidation, including dates of any of the following actions: (i) adoption by the directors or shareholders of Subsidiary of a resolution authorizing Subsidiary to distribute all (or substantially all) its assets; (ii) formal adoption by Subsidiary's shareholders of a plan of complete liquidation (or a plan of merger of Subsidiary into Parent); (iii) filing with the District Director of Form 966 (and any supplement or amendment thereto) as required by section 1.6043-1(a) of the regulations; and (iv) recordation of relevant actions in Subsidiary's official record books. State whether Parent or Subsidiary took any action (including entering into negotiations or agreements) prior to the formal shareholder adoption of the plan that could be interpreted as indicating a prior informal adoption of a plan of liquidation for Subsidiary. See Rev. Rul. 75-521, 1975-2 C.B. 120, Rev. Rul. 70-106, 1970-1 C.B. 70, Rev. Rul. 65-235, 1965-2 C.B. 88.

2. Give the dates of the first and the final liquidating distributions. If all distributions will occur within a single taxable year, submit the following REPRESENTATION: ALL DISTRIBUTIONS FROM S TO P PURSUANT TO THE PLAN OF COMPLETE LIQUIDATION WILL BE MADE WITH A SINGLE TAXABLE YEAR OF S. Alternatively, if all distributions will not be made within a single taxable year of Subsidiary, submit the following REPRESENTATIONS: S HAS ADOPTED A PLAN OF LIQUIDATION SPECIFYING THAT THE FINAL LIQUIDATING DISTRIBUTION IS TO BE COMPLETED WITHIN 3 YEARS FROM THE CLOSE OF THE TAXABLE YEAR OF S IN WHICH THE FIRST LIQUIDATING DISTRIBUTION IS MADE. See section 332(b)(3) of the Code and section 1.332-4(a)(1) of the regulations. See section 5.02(2) of this revenue procedure as to submission of a copy of the plan of liquidation.

3. Submit the following REPRESENTATION: AS SOON AS THE FIRST LIQUIDATING DISTRIBUTION HAS BEEN MADE, S WILL CEASE TO BE A GOING CONCERN AND ITS ACTIVITIES WILL BE LIMITED TO WINDING UP ITS AFFAIRS, PAYING ITS DEBTS, AND DISTRIBUTING ITS REMAINING ASSETS TO ITS SHAREHOLDERS.

4. Provide facts as to dissolution of Subsidiary.

(a) State whether all the stock in Subsidiary will be redeemed and cancelled and Subsidiary dissolved. If not, give reasons.

(b) State whether Subsidiary will retain any assets following the final liquidating distribution.

(1) If not assets will be retained, submit the following REPRESENTATION: S WILL RETAIN NO ASSETS FOLLOWING THE FINAL LIQUIDATING DISTRIBUTION.

(2) If assets are to be retained, state the nature of the assets, their fair market value, the maximum length of time they will be retained, the purpose for retention, and whether this same purpose could have been achieved equally well and with no significant additional cost or difficulty through use of other means such as a liquidating trust. See Rev. Rul. 80-150, 1980-1 C.B. 316, and Rev. Rul. 72-137, 1972-1 C.B. 101.

(3) State whether Subsidiary will retain minimum assets and remain in existence for the purpose of either retaining its corporate identity and/or selling its corporate charter.

(A) If Parent will retain the stock of Subsidiary with Subsidiary remaining in existence and retaining a nominal amount of assets solely for the for the purpose of preserving Subsidiary's legal existence, its corporate identity, and/or its corporate charter, explain why this is necessary and submit the following REPRESENTATION: S WILL REMAIN IN EXISTENCE AS AN INACTIVE SUBSIDIARY OF P SOLELY FOR THE PURPOSE OF ENABLING P TO PROTECT THE CORPORATE CHARTER, LEGAL EXISTENCE, AND/OR IDENTITY OF S. S WILL RETAIN ITS CORPORATE CHARTER AND ONLY THOSE ASSETS REQUIRED UNDER LOCAL LAW TO MAINTAIN CORPORATE EXISTENCE (MINIMUM CAPITAL). S WILL ENGAGE IN NO ACTIVITY OTHER THAN ACTION REQUIRED UNDER LOCAL LAW TO PRESERVE ITS CHARTER, LEGAL EXISTENCE, AND/OR IDENTITY. See section 1.332-2(c) of the regulations.

(B) If Parent will retain the stock of Subsidiary solely for the purpose of selling Subsidiary's corporate charter, comply with these three requirements.

(i) Describe the assets being retained, why it is necessary for Subsidiary to retain them, and submit the following REPRESENTATION: S WILL RETAIN ITS CORPORATE CHARTER AND ONLY THOSE ASSETS REQUIRED UNDER LOCAL LAW TO MAINTAIN CORPORATE EXISTENCE (MINIMUM CAPITAL).

(ii) Describe fully the expected sale by Parent of the Subsidiary stock and furnish the name of the acquiring party, and the consideration expected to be received. Submit the following REPRESENTATION: THE SOLE REASON THAT S WILL NOT BE DISSOLVE UNDER LOCAL LAW IS TO ISOLATE THE VALUE OF S'S CHARTER FOR RESALE TO A PURCHASER THAT IS NOT RELATED TO S, P, OR THEIR SHAREHOLDERS. FOR PURPOSES OF THIS REPRESENTATION A PURCHASER THAT IS NOT RELATED IS A PURCHASER THAT DOES NOT OWN, ACTUALLY OR CONSTRUCTIVELY PURSUANT TO SECTION 318(a) OF THE CODE AS MODIFIED BY SECTION 304(c)(3), ANY STOCK OF S OR P OR THEIR SHAREHOLDERS.

(iii) Describe whether the sale of the charter will be accompanied by the sale or dissolution of Subsidiary and submit the following REPRESENTATION: AS SOON AS REASONABLY POSSIBLE, AND IN ANY EVENT WITHIN NO MORE THAN 12 MONTHS FROM THE DATE OF THE FINAL LIQUIDATING DISTRIBUTION, S WILL BE DISSOLVED UNDER LOCAL LAW OR SOLD TO AN UNRELATED PURCHASER.

(C) If Subsidiary will remain in existence and retain its corporate charter and only those assets necessary to maintain its corporate existence for either of the purposes specified in (A) and (B) above, then to comply with the complete-liquidation requirement of section 332(a) of the Code and the distribution-of-all-the- property requirement of section 332(b)(2) and (3), the assets retained by Subsidiary will be treated as having been distributed to Parent in the final liquidating distribution and then transferred by Parent to a new corporation. See Rev. Proc. 89-50, 1989-2 C.B. 631, which indicates that such a deemed distribution and reincorporation is consistent with established law regarding de facto dissolutions. Submit the following REPRESENTATION: S AND P WILL TREAT THE CHARTER AND MINIMUM CAPITAL AS DISTRIBUTED TO P IN THE FINAL LIQUIDATING DISTRIBUTION AND THEN CONTRIBUTED BY P TO THE CAPITAL OF A NEW CORPORATION (NEW S). S WILL BE TREATED FOR FEDERAL TAX PURPOSES AS NEW S AND WILL OBTAIN A NEW EMPLOYER IDENTIFICATION NUMBER.

04 Transfers of assets to and from Subsidiary.

1. If Subsidiary will not have acquired any assets in a non- taxable transaction, except for acquisitions occurring more than 3 years prior to adoption of the liquidation plan, submit the following REPRESENTATION: S WILL NOT HAVE ACQUIRED ASSETS IN ANY NONTAXABLE TRANSACTION AT ANY TIME, EXCEPT FOR ACQUISITIONS OCCURRING MORE THAN 3 YEARS PRIOR TO THE DATE OF ADOPTION OF THE PLAN OF LIQUIDATION. Alternatively, if Subsidiary will have acquired assets in a nontaxable transaction during this 3-year period, provide full details.

2. Submit the following REPRESENTATION: NO ASSETS OF S HAVE BEEN, OR WILL, BE DISPOSED OF BY EITHER S OR P EXCEPT FOR DISPOSITIONS IN THE ORDINARY COURSE OF BUSINESS AND DISPOSITIONS OCCURRING MORE THAT 3 YEARS PRIOR TO ADOPTION OF THE PLAN OF LIQUIDATION. Alternatively, if any Subsidiary assets have been or will be disposed of by either Subsidiary or Parent, other than in the ordinary course of business, briefly describe the transaction and furnish the following:

(i) Name of acquiring party;

(ii) Description of the assets;

(iii) Consideration received.

3. If, in the liquidation or in the 3-year period prior thereto, any assets of Subsidiary will have been acquired by a corporation, other than Parent, except by sales in the normal course of business, set forth the number of shares and the percentage of each class of the acquiring corporation's stock owned actually and constructively (within the meaning of section 318 of the Code as modified by section 304(c)(3)) by Subsidiary, Parent and Parent's shareholders, and the number of shares and the percentage of each class of Parent stock owned actually and constructively by the acquiring corporation and its shareholders.

4. Submit the following REPRESENTATION: THE LIQUIDATION OF S WILL NOT BE PRECEDED OR FOLLOWED BY THE REINCORPORATION IN, OR TRANSFER OR SALE TO, A RECIPIENT CORPORATION (RECIPIENT) OF ANY OF THE BUSINESSES OR ASSETS OF S, IF PERSONS HOLDING, DIRECTLY OR INDIRECTLY, MORE THAN 20 PERCENT IN VALUE OF THE S STOCK ALSO HOLD, DIRECTLY OR INDIRECTLY, MORE THAN 20 PERCENT IN VALUE OF THE STOCK IN RECIPIENT. FOR PURPOSES OF THIS REPRESENTATION, OWNERSHIP WILL BE DETERMINED BY APPLICATION OF THE CONSTRUCTIVE OWNERSHIP RULE OF SECTION 318(a) OF THE CODE AS MODIFIED BY SECTION 304(c)(3).

5. Describe prior distributions to Parent.

(a) If prior distributions were made only in the normal course of business, submit the following REPRESENTATION: PRIOR TO ADOPTION OF THE LIQUIDATION PLAN, NO ASSETS OF S WILL HAVE BEEN DISTRIBUTED IN KIND, TRANSFERRED, OR SOLD TO P, EXCEPT FOR (i) TRANSACTIONS OCCURRING IN THE NORMAL COURSE OF BUSINESS AND (ii) TRANSACTIONS OCCURRING MORE THAN 3 YEARS PRIOR TO ADOPTION OF THE LIQUIDATION PLAN.

(b) If there will have been asset transfers not meeting the representation in (a) above, describe the assets so transferred, including their bases and fair market value, the transaction in which they were transferred, the date of transfer, and the reason for the transaction.

6. Provide facts showing that Subsidiary holds no assets representing earned but unreported income, or submit the following REPRESENTATION: S WILL REPORT ALL EARNED INCOME REPRESENTED BY ASSETS THAT WILL BE DISTRIBUTED TO ITS SHAREHOLDERS, SUCH AS RECEIVABLE BEING REPORTED ON A CASH BASIS, UNFINISHED CONSTRUCTION CONTRACTS, COMMISSIONS DUE, ETC.

05 LIABILITIES

1. In order to demonstrate solvency, submit the following REPRESENTATION: THE FAIR MARKET VALUE OF THE ASSETS OF S WILL EXCEED ITS LIABILITIES BOTH AT THE DATE OF THE ADOPTION OF THE PLAN OF COMPLETE LIQUIDATION AND IMMEDIATELY PRIOR TO THE TIME THE FIRST LIQUIDATING DISTRIBUTION IS MADE.

2. State the amount and provide complete details concerning the debt, if any, owed by Subsidiary to Parent or by Parent to Subsidiary, how and when it was created, the cost and tax basis of the creditor, and how debts have been or will be cancelled, forgiven, or discounted during the period commencing 3 years prior to adoption of the plan of liquidation (or since the initial acquisition by Parent of stock of Subsidiary, if that is later) and ending with final liquidating distribution. If no intercorporate debt exists and none has been cancelled, forgiven or discounted, submit the following REPRESENTATION: THERE IS NO INTERCORPORATE DEBT EXISTING BETWEEN P AND S AND NONE HAS BEEN CANCELLED, FORGIVEN, OR DISCOUNTED, EXCEPT FOR TRANSACTIONS, THAT OCCURRED MORE THAN 3 YEARS PRIOR TO THE DATE OF ADOPTION OF THE LIQUIDATION PLAN (OR, ALTERNATIVELY, IF SUCH DATE IS LATER) EXCEPT FOR TRANSACTIONS OCCURRING PRIOR TO THE DATE P INITIALLY ACQUIRED S STOCK.

06 STATE WHETHER OR NOT PARENT IS TAX-EXEMPT.

1. If Parent is not tax-exempt, submit the following REPRESENTATION: P IS NOT AN ORGANIZATION THAT IS EXEMPT FROM FEDERAL INCOME TAX UNDER SECTION 501 OR ANY OTHER PROVISION OF THE CODE.

2. If Parent is tax-exempt, is an exception to section 337(b)(2)(A) of the Code applicable (i) as a result of Parent being a cooperative described in section 521, or (ii) as a result of the income from the distributed property being subject to tax under section 511(a)?

07 IF SUBSIDIARY HAS MINORITY SHAREHOLDERS, PROVIDE ADDITIONAL MATERIAL AS INDICATED BELOW.

1. If the distribution is pro rata, submit the following REPRESENTATION: THE FAIR MARKET VALUE OF THE CONSIDERATION RECEIVED BY P AND BY THE MINORITY SHAREHOLDERS FOR EACH SHARE OF S STOCK WILL APPROXIMATELY EQUAL THE FAIR MARKET VALUE OF THAT STOCK. ALTERNATIVELY, IF THE DISTRIBUTION IS NOT PRO RATA, EXPLAIN WHY THE SERVICE SHOULD NOT TREAT THE TRANSACTION AS A PRO RATA DISTRIBUTION FOLLOWED BY AN INTERSHAREHOLDER TRANSFER OF THE NON-PRO-RATA PORTION. SEE REV. RUL. 79-10, 179-1 C.B. 140.

2. State whether, and explain the reasons why, it is expected that the transaction will constitute a statutory merger with regard to minority shareholders.

(a) If rulings are requested as to the tax treatment of minority shareholders, as a result of the transaction constituting a statutory merger, provide a brief description of the assets being distributed to minority shareholders and submit the requisite information and representations (see Rev. Proc. 77-37, 1977-2 C.B. 568, as amplified by Rev. Proc. 86-42, 1986-2 C.B. 722).

(b) Explain why it is expected that section 361(c)(1) of the Code will, or will not, apply to the distribution by Subsidiary to its minority shareholders. State whether the property distributed to the minority shareholders includes property other than "qualified property" within the meaning of section 361(c)(2)(B).

3. If the distribution to the minority shareholders is taxable (as a liquidation under section 331 of the Code to which section 336 applies or as a reorganization under section 368 to which section 361(c)(1) does not apply), provide information as follows.

(a) Provide relevant details concerning the amount and kind of assets to be distributed to minority shareholders in exchange for their Subsidiary stock. State which of these assets has a fair market value greater than its basis in the hands of Subsidiary. State whether Subsidiary is distributing to its minority shareholders (i) any installment obligations (section 453B of the Code), (ii) any property described in the recapture provisions of the Code, including (but not limited to) sections 47, 291(a), 341(f), 617(d), 897(d), 904(f), 1245(a), 1248(f), 1250(c), 1252(a), 1254, or 1255, (iii) any property for which Subsidiary obtained a deduction (see Hillsboro National Bank v. Commissioner, 460 U.S. 370 (1983), 1983-1 C.B. 50; Rev. Rul. 85-186, 1985-2 C.B. 84; Rev. Rul. 74-396, 1974-2 C.B. 106; Rev. Rul. 61-214, 1961-2 C.B. 60); or (iv) any property described in sections 1256 or 1276.

(b) If installment obligations will be distributed, describe the nature and terms of the obligations. State how the shareholders intend to treat payments received on the installment obligations. State the effect of sections 453(h) and 453B(d) of the Code on Subsidiary's distribution.

(c) Delete any inapplicable provisions and then submit the applicable portion of the following REPRESENTATION: NONE OF THE ASSETS BEING DISTRIBUTED BY S TO THE MINORITY SHAREHOLDERS (i) HAS A FAIR MARKET VALUE GREATER THAN ITS BASIS IN THE HANDS OF S, (ii) IS AN INSTALLMENT OBLIGATION, (iii) IS PROPERTY DESCRIBED IN THE RECAPTURE PROVISIONS OF THE CODE, OR (iv) IS PROPERTY FOR WHICH S OBTAINED A DEDUCTION.

PART II -- GENERAL

SEC. 5. GENERAL INSTRUCTIONS TO, AND INFORMATION FOR, TAXPAYERS

01 DISCUSS IMPACT OF RELATED TRANSACTIONS. State whether there have been, or will be, any related transactions, and, if so, briefly describe these other transactions and fully explain their relationship to, and impact on, the present transaction. See section 3.07 of Rev. Proc. 90-1. Other than transfers already discussed in the ruling request, have there been, or will there be, any transfers of assets between Parent and Subsidiary? Even if a transaction is thought to be unrelated, a brief description of the transaction should be submitted if (i) it involves Parent, Subsidiary, or a direct or indirect subsidiary of Subsidiary, and (ii) it occurs contemporaneously with, or in conjunction with, the proposed liquidation of Subsidiary. For instance, describe any plan or intent to merge or liquidate Parent. Submit the following REPRESENTATION: ALL OTHER TRANSACTIONS UNDERTAKEN CONTEMPORANEOUSLY WITH, IN ANTICIPATION OF, IN CONJUNCTION WITH, OR IN ANY WAY RELATED TO, THE PROPOSED LIQUIDATION OF S HAVE BEEN FULLY DISCLOSED.

02 SUBMIT COPIES OF ALL RELEVANT DOCUMENTS.

1. Submit the latest separate balance sheets for both Subsidiary and Parent.

2. Submit a copy of the plan of liquidation of Subsidiary, and all amendments thereto. Alternatively, state why a copy is not available. If the plan of liquidations not be reduced to writing, explain why and the Service should consider the plan to be adopted. See section 1.332-6 of the regulations.

03 SEE REV. PROC. 90-1, OR ITS SUCCESSOR, DEALING WITH GENERALLY APPLICABLE PROCEDURAL REQUIREMENTS. In accord with Rev. Proc. 90-1, provide additional information and statements that must be submitted with all ruling requests, including statements required relating to penalties of perjury and relating to deletions under section 6110 of the Code.

04 LIST EVERY RULING BEING REQUESTED. For each requested ruling state the ruling in exactly the language desired in the issued ruling letter and provide the Code and regulation sections or other authority supporting issuance of the ruling.

05 SUBMIT LEGAL MEMORANDUM. See section 3.14 of Rev. Proc. 90-1, or its successor, requiring the taxpayer to (i) state the taxpayer's view as to the result of the transaction, (ii) explain the legal grounds for this result, and (iii) describe the relevant legal authorities. In order to facilitate an early resolution of problems, taxpayers are advised that if they are taking a position that either lacks substantial authority or is contra to the published position of the Service, they are encouraged to disclose this in the memorandum.

SEC. 6. COMMENTS OR INQUIRIES

Comment or inquiries regarding this revenue procedure should refer to its number and should be addressed to the Associate Chief Counsel (Technical), Attention: CC:CORP:5, Internal Revenue Service, Washington, D.C. 20224.

SEC. 7. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 81-68 is superseded.

DRAFTING INFORMATION

The principal author of this revenue procedure is Michael J. Danbury of the Office of the Assistant Chief Counsel (Corporate). For further information regarding this revenue procedure, contact Mr. Danbury on (202) 566-3544 or Mr. Christopher F. Kane on (202) 566- 3551 (not a toll-free call).