Qualifying Services under IRC 7704

IRS Private Letter Ruling 201213004

This letter responds to a letter dated May 25, 2011, and subsequent correspondence by X’s authorized representative, requesting rulings under § 7704 of the Internal Revenue Code on behalf of X.

FACTS
The information submitted states that X is a State limited liability company that elected to be classified as an association for federal income tax purposes.  X is a registered broker-dealer.  X proposes to operate two separate matching services, the Qualifying Service and the NonQualifying Service (collectively, the “Services”), which facilitate the buying and selling of third party limited partnership interests.  Listings on the Qualifying Service are separate from listings on the NonQualifying Service.  The same interests in a partnership will not be simultaneously listed on both the Qualifying Service and the NonQualifying Service. The Qualifying Service operates in a manner designed to satisfy the qualified matching service requirements set forth in § 1.7704-1(g) of the Procedure and Administration Regulations.  The NonQualifying Service fails to satisfy one or more of the requirements in § 1.7704-1(g).

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