(A) Facts. UST has a 40 percent stake and participates in a foreign partnership (PRS). PRS owns TFD and other assets based on fair value. TFD stock has a base of 50 times and a market value 200 times higher than $200. TFC owns Formula 1. On the first day of Year 1, UST transfers its PRS stake in TFC to a Exchange pursuant to Section 351 in exchange for TFC shares (First Transfer). On the same day, TFC transferred the PRS interest received by UST on Formula 1 to a exchange pursuant to Section 351, in exchange for Formula 1 shares exclusively. In year 3, the SRP receives a distribution 150 times greater than Section 301. In accordance with Section 301(c), the distribution is 25 times the dividend, 50 times applied to tfD shares held by PRS and reduces them, and the remaining 75x are treated as profits from the sale or exchange of real estate. With respect to TFD shares deemed to be transferred by UST upon initial transmission, Pursuant to Section 301(c)10x (40% of $25x) of the distribution represent a dividend, 20x (40% of $50x) are applied on the basis of TFD shares and reduce them and $30x (40% of $75x) is treated as a gain from the sale or exchange of ownership.

During Year 5, PRS distributes all tfd shares to F1 in a distribution that applies to Section 731. (ii) Example 2. the impact of the profit realization event on income calculation – (i) Retains the assets of the U.S. transferor sufficient to honor a possible U.S. federal tax debt Contemptuous under the earnings recognition agreement for the duration of the extended limitation period for tax notices on profits made but not recognized in the initial transfer; (i) the agreement on the first recognition of profits and all other documents relating to the agreement on the recognition of profits that must be filed under the initial agreement on the recognition of profits shall be annexed to a timely tax return from the United States authority for the fiscal year in which the initial transfer takes place; and (3) description of the shares or securities transferred and other information. The benefit recognition agreement must contain: (3) examples. The following examples illustrate the application of this paragraph (p). All examples are based exclusively on the following facts and any additional facts mentioned in the example. DC, a national company, owns FS and FA, a foreign company, entirely.

In Year 1, DC transferred all of FS`s shares to FA solely in exchange for FS Transfer voting shares, following a transaction qualified both as a Section 351 exchange and as a reorganization under Section 368(a)(1)(B). At the time of the transfer of FS, the fair value of the FS share exceeded DC`s tax base in the share. . . .