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David T. Leibell and Daniel L. Daniels, partners at Wiggin and Dana LLP, in Stamford, Conn., report: Private Letter Ruling 200734023, issued Aug. 24, 2007, shows how the Internal Revenue Code Section 4941 self-dealing rules apply in a situation involving the liquidation of partnerships in which a private foundation held an interest. The taxpayer sought and received a ruling that the liquidation of
December 1, 2007
Rorie M. Sherman Editor in Chief
David T. Leibell and Daniel L. Daniels, partners at Wiggin and Dana LLP, in Stamford, Conn., report:
Private Letter Ruling 200734023, issued Aug. 24, 2007, shows how the Internal Revenue Code Section 4941 self-dealing rules apply in a situation involving the liquidation of partnerships in which a private foundation held an interest. The taxpayer sought — and received — a ruling that the liquidation of the three limited partnerships and the pro rata distribution of assets to the partners would not constitute a prohibited act of self-dealing.
While the taxpayer was successful, though, the ruling highlights the scary prospect of indirect self-dealing when business assets are transferred to a private foundation....
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