SECTION 5. AREAS UNDER

STUDY IN WHICH RULINGS OR DETERMINATION LETTERS WILL NOT BE ISSUED UNTIL THE SERVICE RESOLVES THE ISSUE THROUGH PUBLICATION OF A REVENUE RULING, A REVENUE PROCEDURE, REGULATIONS, OR OTHERWISE

.01 Specific Questions and Problems. (1) Sections 302 and 304.—Distributions in Redemption of Stock; Redemptions Through Use of Related Corporations.—Treatment of basis in a § 302 or 304 redemption. See Withdrawal of a Notice of Proposed Rulemaking published in the Federal Register (84 FR 11686) on March 28, 2019.

(2) Sections 351, 358, and 362.— Transfer to Corporation Controlled by Transferor; Basis to Distributees; Basis to Corporations.—The issues described as being under study in Rev. Rul. 2006-2, 2006-1 C.B. 261. (3) Section 355.—Distribution of Stock and Securities of a Controlled Corpora

tion.—Any issue relating to the qualification, under § 355 and related provisions, of a distribution, or another distribution which is part of the same plan or series of related transactions, if, at all times while any such distribution takes place and immediately thereafter, all of the following conditions exist: (i) the fair market value of the gross investment assets of the distributing corporation or the controlled corporation is two-thirds or more of the fair market value of its total gross assets; (ii) the fair market value of the gross assets of the trade(s) or business(es) on which the distributing corporation or the controlled corporation relies to satisfy the active trade or business requirement of § 355(b) is less than 10 percent of the fair market value of its gross investment assets; and (iii) the ratio of the fair market value of the gross investment assets to the fair market value of the gross assets other than the gross investment assets of the distributing corporation or the controlled corporation is three times or more of such ratio for the other corporation (i.e., the controlled corporation or the distributing corporation, respectively).

For purposes of determining the fair market value of the distributing corporation’s and the controlled corporation’s gross investment assets, gross assets other than gross investment assets, gross assets of the trade or business, and total gross assets, all members of such corporation’s separate affiliated group, within the meaning of § 355(b)(3)(B), are treated as one corporation. If the distributing corporation or the controlled corporation relies on an active trade or business of a partnership for purposes of § 355(b), then for purposes of determining the fair market value of the gross assets of the trade(s) or business(es) on which the distributing corporation or the controlled corporation relies to satisfy the active trade or business requirement of § 355(b), such corporation is treated as owning its ratable share of the gross assets of the partnership.

For purposes of this section 5.01(3), “investment assets” has the meaning given such term by § 355(g)(2)(B), except as follows: (i) in the case of stock or securities in a corporation any stock of which is traded on (or subject to the rules of) an established financial market within the meaning of § 1.1092(d)-1(b) (pub

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licly traded stock), § 355(g)(2)(B)(iv) is applied by substituting “50-percent” for “20-percent;” (ii) except as provided in clause (iv) of this sentence, an interest in a publicly traded partnership (as defined in § 7704(b), regardless of whether such partnership is treated as a corporation pursuant to § 7704(a)) is treated in the same manner as publicly traded stock; (iii) except as provided in clause (iv) of this sentence, an interest in a partnership that is not a publicly traded partnership is treated in the same manner as stock which is not publicly traded stock; and (iv) in the case of an interest in a partnership (other than a publicly traded partnership treated as a corporation pursuant to § 7704(a)), the active trade or business of which is taken into account by the distributing corporation or the controlled corporation for purposes of § 355(b), or would be taken into account without regard to the five-year requirement of § 355(b)(2)(B), clauses (ii) and (iii) of this sentence do not apply.

The Service also will not rule on any issue relating to the qualification, under § 355 and related provisions, of a distribution if, as part of a plan or series of related transactions, investment assets are disposed of, or property, including property qualifying as an active trade or business within the meaning of § 355(b), is acquired with a principal purpose of avoiding this section 5.01(3). This section 5.01(3) does not apply if (i) all the stock of the controlled corporation that is distributed in the distribution is distributed to one or more members of the affiliated group, as defined in § 243(b)(2)(A), of which the distributing corporation is a member; and (ii) such distribution is not part of a plan or series of related transactions pursuant to which stock of any corporation will be distributed outside such affiliated group in a distribution described in this section 5.01(3) or in section 4.01(29) of this revenue procedure. See also, section 6.03(2) (b), Rev. Proc. 2023-1, this Bulletin.

(4) Section 358. See section 5.01(2), above.

(5) Section 362. See section 5.01(2), above.

(6) Section 401.—Qualified Pension, Profit-sharing, and Stock Bonus Plans.— Whether a program providing a limited period during which certain retirees who are currently receiving lifetime annuity

payments from a qualified pension plan may elect to convert their annuities into lump sums that are payable immediately (sometimes referred to as a “retiree lumpsum window”) complies with the qualification requirements under section 401. See Notice 2019-18, 2019-13 I.R.B. 915, Part III, which provides that the IRS will not issue private letter rulings with regard to retiree lump-sum windows. However, if a taxpayer is eligible to apply for and receive a determination letter, the IRS will no longer include a caveat expressing no opinion regarding the tax consequences of such a window in the letter. See Rev. Proc. 2023-4, this Bulletin, for the procedures that apply to requests for determination letters under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements.

(7) Section 613A.—Limitations on Percentage Depletion in Case of Oil and Gas Wells.—Whether the sale of oil or gas, or any product derived from oil or gas, is a bulk sale for purposes of § 613A(d)(2).

(8) Sections 661 and 662.—Deduction for Estates and Trusts Accumulating Income or Distributing Corpus; Inclusion of Amounts in Gross Income of Beneficiaries of Estates and Trusts Accumulating Income or Distributing Corpus.—Whether the distribution of property by a trustee from an irrevocable trust to another irrevocable trust (sometimes referred to as a “decanting”) resulting in a change in beneficial interests is a distribution for which a deduction is allowable under § 661 or which requires an amount to be included in the gross income of any person under § 662.

(9) Section 671.—Trust Income, Deductions, and Credits Attributable to Grantors and Others as Substantial Owners.—Whether the grantor will be considered the owner of any portion of a transfer in trust under §§ 673 to 677 that is purported to be an incomplete gift under § 2511, specifically including, but not limited to, a transfer to a trust providing for distributions at the direction of a committee to the donor and the committee members either by unanimous consent of the committee members or a majority of the committee members with the consent of the donor.

(10) Section 678.—Person other than Grantor Treated as Substantial Owner.—

Whether the beneficiaries of a trust will be considered the owners of any portion of such trust when two or more of such beneficiaries have the power to distribute income or principal to themselves by unanimous consent.

(11) Section 1014.—Basis of Property Acquired from a Decedent.—Whether the assets in a grantor trust receive a § 1014 basis adjustment at the death of the deemed owner of the trust for income tax purposes when those assets are not includible in the gross estate of that owner under chapter 11 of subtitle B of the Internal Revenue Code.

(12) Section 2036.—Transfers with Retained Life Estate.—Whether the corpus of a trust will be included in a grantor’s estate when the trustee of the trust is a private trust company owned partially or entirely by members of the grantor’s family.

(13) Section 2038.—Revocable Transfers.—Whether the corpus of a trust will be included in a grantor’s estate when the trustee of the trust is a private trust company owned partially or entirely by members of the grantor’s family.

(14) Section 2041.—Powers of Appointment.—Whether the corpus of a trust will be included in an individual’s estate when the trustee of the trust is a private trust company owned partially or entirely by members of the individual’s family.

(15) Sections 2041 and 2514.—Powers of Appointment.—Whether the beneficiaries of a trust hold general powers of appointment over any portion of a transfer to a trust when (A) two or more of such beneficiaries have the power to distribute income or principal to themselves by unanimous consent and without the consent of the donor and either (B) such beneficiaries must be replaced upon the lapse of their powers as the result of death or otherwise or (C) all of such beneficiaries’ powers described by (A) lapse upon the death of any one of the beneficiaries.

(16) Section 2501.—Imposition of Tax.—Whether the distribution of property by a trustee from an irrevocable trust to another irrevocable trust (sometimes referred to as a “decanting”) resulting in a change in beneficial interests is a gift under § 2501.

(17) Section 2511.—Transfers in General.—Whether a transfer in trust that is

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purported not to be considered owned by the grantor under § 671 is an incomplete gift, specifically including, but not limited to, a transfer to a trust providing for distributions at the direction of a committee to the donor and the committee members either by unanimous consent of the committee members or a majority of the committee members with the consent of the donor.

(18) Section 2514.—See section 5.01(15), above. (19) Sections 2601 and 2663.—Tax Imposed; Regulations.—Whether the distribution of property by a trustee from an irrevocable generation-skipping transfer tax (GST) exempt trust to another irrevocable trust (sometimes referred to as a “decanting”) resulting in a change in beneficial interests causes the loss of GST exempt status or constitutes a taxable termination or taxable distribution under § 2612.

(20) Sections 4966 and 4967.—Taxes on Taxable Distributions; Taxes on Prohibited Benefits.—Issues involving interpretation of §§ 4966 and 4967 regarding distributions from donor advised funds.

(21) Section 6109. Identifying Numbers. The proper assignment or retention of an employer identification number (EIN) in the case of a reorganization within the meaning of § 368(a)(1)(F) if the transferor corporation becomes disregarded as an entity separate from its owner under § 301.7701-3.

.02 General Areas. Any issue involving the application of a provision of the Code to the extent of any amendment made by Public Law 117169, 136 Stat. 1818 (August 16, 2022), commonly referred to as the Inflation Reduction Act of 2022. The Service may provide general information in response to an inquiry prior to the resolution of the issue.