Part III. Successor Event

A successor event allows for the continued application of the gain deferral method for the affected section 721(c) property on a property-by-property basis by a successor U.S. transferor or a successor section 721(c) partnership. However, if the successor doesn’t continue the gain deferral method, the event is an acceleration event and must be reported in Part I. Successor events are applicable on a property-by-property basis. If only a portion of an interest in a partnership is transferred in a successor event, the rules of Regulations section 1.704-3(a)(7) are applied to determine the remaining built-in gain in the section 721(c) property that is attributable to the portion of the interest that is transferred and the portion that is retained. Regulations section 1.721(c)-5(c) identifies the successor events, including special rules for transactions involving tiered partnerships.

If more than one successor event occurs in the tax year, provide the required information for each event separately in Part IV in chronological date order.

Column (b). Provide a description of the successor event, including the citation to the relevant paragraph in Regulations section 1.721(c)-5(c). See Regulations section 1.721(c)-6(b)(3)(v). Use Part VI if additional space is needed to describe the transaction.

Column (d). Enter the identifying information of the relevant successor, as applicable. In certain successor

events, a domestic corporation becomes the successor U.S. transferor. In other successor events, a partnership becomes the successor section 721(c) partnership. A successor section 721(c) partnership may be a new, upper-tier, or lower-tier partnership. The identifying information must include the name, address, and U.S. taxpayer identification number (TIN), if any, of the successor U.S. transferor or successor section 721(c) partnership.