Windstream PLR Opens Door to Spinoffs With Simultaneous REIT Election

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The Internal Revenue Service appears to have blessed corporate transactions combining a tax-free spinoff with a simultaneous election for real estate investment trust status, practitioners told Bloomberg BNA.
The July 29 announcement by telecommunications company Windstream Holdings Inc. that it plans to place its copper and fiber networks into a publicly traded REIT has many telecom companies now considering whether they can also take advantage of similar tax optimization structures, Keith Martin, a partner at Chadbourne & Parke LLP in Washington, said Aug. 4.
The private letter ruling obtained by Windstream that allows the company to proceed with the transaction is significant in that it seems to settle uncertainty about whether the IRS would respect the tax-free transaction of a spinoff coupled with a REIT election, Robert Willens, a corporate tax consultant in New York, said Aug. 5 (146 DTR G-2, 7/30/14).