Replies to post #675823 on Mr Cooper Group Inc (COOP)

[STRIKEEAGLE]

Thanks New... does anyone know what 'Date 7' is ? TIA



STRIKE

[Large Green]

Thanks Newflow but I thought there was another similar PLR that cane out in very late of year 2020 to February of year 2021 discussing the trust extension with many more details about shares, a shell company and more but I could be mistaken.

[Large Green]

POTENTIAL (PLR) PRIVATE LETTER RULING BROKEN DOWN - DATES POSITED IN RED ADDED TO SHOW REALITY BASED ON KNOWN FACTS/FILINGS

PLR DATED AUGUST 05, 2020

https://www.irs.gov/pub/irs-wd/202044002.pdf

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 202044002
Release Date: 10/30/2020
Index Number: 7701.03-00, 7701.03-06

Refer Reply To:
CC:PSI:B03
PLR-104583-20
Date:
August 05, 2020

LEGEND

Trust = -------------------------------------------------------------------------------------
-----------------------

Date 1 = -------------------------

Date 2 = -------------------

Date 3 = -------------------

Date 4 = 3/19/2012 - 3/19/2015...1st origin 3 years of WMILT

Date 5 = 3/20/2015 - 3/19/2018

Date 6 = 1/17/2020

Date 7 = 3/19/2022

Liquidating Trustee = ---------------------

Debtor = ---------------------------------------

Plan = -------------------------------------------------------------------------------------
-------------------------------------------

Dear -----------:

This responds to a letter dated January 17, 2020, and subsequent
correspondence, submitted on behalf of Trust, requesting a ruling regarding the
classification of Trust as a liquidating trust under § 301.7701-4(d) of the Procedure and
Administration Regulations.

FACTS
The information submitted states that on Date 1 Debtor filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court. On Date 2, Plan was confirmed by the Bankruptcy Court and became effective
Date 3.
PLR-104583-20 2
The initial term of Trust was for three years ending Date 4, but could be extended
by request to the Bankruptcy Court for successive fixed terms not to exceed three
years. The initial term of the Trust expired before the Liquidating Trustee completed its
duties under the Plan and trust agreement. On motion to the Bankruptcy Court,
Liquidating Trustee requested an extension of the Trust term to Date 5, nunc pro tunc to
Date 4, arguing the extension was necessary to implement the Plan and the trust
agreement. On Date 6, the Bankruptcy Court granted the Liquidating Trustee’s motion.
Simultaneously with submitting its request for this ruling, Liquidating Trustee has made
an additional request to the Bankruptcy Court for an extension of the Trust term until
Date 7.
Pursuant to the Plan and the trust agreement, the Trust was established to
oversee and effect the orderly liquidation and conversion to cash of those assets
conveyed to the Trust pursuant to the Plan, resolve claims to be satisfied by the Trust,
review and, or pursue causes of action assigned to the Trust, make any and all
distributions by the Trust provided for in the Plan to the beneficiaries in accordance with
Treas. Reg. Sec. 301.7701-4(d), and administer and pay the Liquidating Trustee's fees
and expenses.
In accordance with the Plan, the trust agreement states that Trust was created
for the primary purpose of liquidating the assets transferred to it, with no objective to
continue or engage in the conduct of a trade or business except to the extent
reasonably necessary to, and consistent with, the liquidating purpose of the Trust.
Pursuant to the trust agreement, the beneficiaries of Trust will be treated as the
grantors, deemed owners, and beneficiaries of Trust for federal tax purposes consistent
with the requirements of Rev. Proc. 94-45, 1994-2 C.B. 684. The trust agreement
requires that the Liquidating Trustee file returns for Trust as a grantor trust pursuant to
Treas. Reg. § 1.671-4(a). Trust is required to distribute to the beneficiaries of Trust at
least annually its net income and all net proceeds from the sale of the assets of Trust,
except that Trust may retain an amount of net proceeds or net income reasonably
necessary to maintain the value of the property of Trust or pay or contingent liabilities of
Trust.
Under the trust agreement, Trust shall not receive or retain cash in excess of a
reasonable amount to meet claims and contingent liabilities or to maintain the value of
the assets during liquidation. Cash not available for distribution and cash pending
distribution will be held in cash, cash equivalents, U.S. Treasury securities, money
market investments, and similar investments, but limited to those investments permitted
under § 301.7701-4(d).
The Liquidating Trustee represents that, from its establishment, Trust has been
formed and operated consistent with the conditions set forth in Rev. Proc. 94-45.
Liquidating Trustee further represents that he will make continuing efforts to dispose of
PLR-104583-20 3
the assets of the Trust, make timely distributions, and not unduly prolong the duration of
the Trust. Liquidating Trustee also represents that certain continuing adversary
proceedings have made it impossible to completely liquidate by Date 5, the end of its
first period of extension. The trust agreement provides that the aggregate of all allowed
extensions shall not exceed three years, unless the trustee receives a favorable ruling
from the Internal Revenue Service that any further extensions would not adversely
affect the status of Trust as a liquidating trust under § 301.7701-4(d). Therefore, Trust
requests a ruling that an extension of the term of Trust by an additional year ending on
Date 7 will not adversely affect its status as a liquidating trust under § 301.7701-4(d).

LAW AND ANALYSIS
Section 671 of the Internal Revenue Code provides that where it is specified in
subpart E that the grantor or another person shall be treated as the owner of any portion
of a trust, there then shall be included in computing the taxable income and credits of
the grantor or the other person those items of income, deductions, and credits against
tax of the trust that are attributable to that portion of the trust to the extent that such
items would be taken into account under chapter 1 of the Code in computing taxable
income or credits against the tax of an individual.
Section 1.671-4(a) provides that, except as provided in § 1.671-4(b)(1) and §
1.671-5, items of income, deduction, and credit attributable to any portion of a trust
which, under the provisions of subpart E (§ 671 and following), part I, subchapter J,
chapter 1 of the Code, are treated as owned by the grantor or another person should
not be reported by the trust on Form 1041, “U.S. Income Tax Return for Estates &
Trusts”, but should be shown on a separate statement attached to that form.
Section 301.7701-4(d) provides that certain organizations which are commonly
known as liquidating trusts are treated as trusts for purposes of the Internal Revenue
Code. An organization will be considered a liquidating trust if it is organized for the
primary purpose of liquidating and distributing the assets transferred to it, and if its
activities are all reasonably necessary to, and consistent with, the accomplishment of
that purpose. A liquidating trust is treated as a trust for purposes of the Code because it
is formed with the objective of liquidating particular assets and not as an organization
having as its purposes the carrying on of a profit-making business which normally would
be conducted through business organizations classified as corporations or partnerships.
However, if the liquidation is unreasonably prolonged or if the liquidation purpose
becomes so obscured by business activities that the declared purpose of liquidation can
be said to be lost or abandoned, the status of the organization will no longer be that of a
liquidating trust.
Rev. Proc. 94-45 provides the conditions under which the Service will consider
issuing advance rulings classifying certain trusts as liquidating trusts under
§ 301.7701-4(d). Rev. Proc. 94-45 states that the Service will issue a ruling classifying
an entity created pursuant to a bankruptcy plan under Chapter 11 of the Bankruptcy
PLR-104583-20 4
Code, 11 U.S.C. § 1101, et. seq., as a liquidating trust under § 301.7701-4(d) if certain
conditions are met.
Section 3.06 of Rev. Proc. 94-45 provides that the trust instrument must contain
a fixed or determinable termination date that is generally not more than five years from
the date of the creation of the trust and that is reasonable based on all of the facts and
circumstances. If warranted by the facts and circumstances, provided for in the plan and
trust instrument, and subject to the approval of the Bankruptcy Court with jurisdiction
over the case upon a finding that the extension is necessary to the liquidating purpose
of the trust, the term of the trust may be extended for a finite time based on its particular
facts and circumstances. The trust instrument must require that each extension be
approved by the court within 6 months of the beginning of the extended term.

CONCLUSIONS
Based on the information submitted and the representations made, we conclude
that the conditions of Rev. Proc. 94-45 have been satisfied. Accordingly, based on the
representations made and the information submitted, we rule that Trust is classified for
federal tax purposes as a liquidating trust under § 301.7701-4(d) and the extension of
Trust’s term to Date 7 will not adversely affect that determination. Therefore, Trust will
continue to be treated as a grantor trust and the beneficiaries of Trust will continue to be
treated as the owners of Trust under § 671 to the extent Trust otherwise qualifies as
such.
Except as expressly set forth above, we express or imply no opinion concerning
the federal income tax consequences of the facts described above under any other
provision of the Code.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of
the Code provides that it may not be used or cited as precedent.
The ruling contained in this letter is based upon information and representations
submitted by the taxpayer and accompanied by a penalty of perjury statement executed
by an appropriate party. While this office has not verified any of the materials submitted
as part of the ruling request, it is subject to verification on examination.
PLR-104583-20 5
In accordance with the power of attorney on file with this office, we are sending a
copy of this letter to Trust’s authorized representatives.
Sincerely,
Adrienne M. Mikolashek
Branch Chief, Branch 3
Office of the Associate Chief Counsel
(Passthroughs & Special Industries)

__________________________________________

BREAKDOWN...of POTENTIAL PLR...

" On Date 6, the Bankruptcy Court granted the Liquidating Trustee’s motion.

Simultaneously with submitting its request for this ruling, Liquidating Trustee has made an additional request to the Bankruptcy Court for an extension of the Trust term until Date 7."

Here are the key parts in the remaining letter:

(1) Therefore, Trust requests a ruling that an extension of the term of Trust by an additional year ending on Date 7 will not adversely affect its status as a liquidating trust under § 301.7701-4(d).

(2) CONCLUSIONS

Based on the information submitted and the representations made, we conclude the conditions of Rev. Proc. 94-45 have been satisfied.

Accordingly, based on the representations made and the information submitted, we rule that Trust is classified for federal tax purposes as a liquidating trust under § 301.7701-4(d) and the extension of Trust’s term to Date 7 will not adversely affect that determination.

Therefore, Trust will continue to be treated as a grantor trust and the beneficiaries of Trust will continue to be treated as the owners of Trust under § 671 to the extent Trust otherwise qualifies as such.