In partially redacted field attorney advice (FAA 20132101F), the
IRS has determined that a partnership continued in the form of a
new local law entity after a series of transactions in which
original partnership interests were exchanged for interests in a
new local law entity, and the original partnership became a
disregarded entity wholly owned by the new local law entity.
The taxpayer addressed in the advice was organized as a limited
liability partnership and entered into a series of transactions in
which a new local law entity created a transitory subsidiary that
merged with the original partnership, and the partners received
interest in the new local law entity or cash. Following the merger,
the original partners held more than 50% of the new local law
entity, a partnership, and the original partnership continued to
operate the business as a wholly owned disregarded entity of the
new local law entity.
