Client Publication June 2003

Reduced Tax Rates for and Capital Gains

On May 28, 2003, President George W. Bush signed General Rules into law, as part of the widely publicized Jobs and Growth Tax Relief Reconciliation Act of 2003 (the Reduction of rates, effective dates, and sunset. Generally, both “qualified income” (“QDI”) “Act”), preferential income tax rates applicable to 2 most corporate dividends received by, and net long and net long term capital gains (“net capital gains”) term capital gains recognized by, United States indi- recognized by individuals, trusts and estates that are viduals, trusts and estates. This legislation is signifi- United States persons will be taxed at a rate of 15% (5% in the case of individuals who are in tax rate cant in part because the preferential rate (generally 3 15%) is significantly lower than the highest marginal brackets below 25%). The operative statutory provi- sion (new section 1(h)(11) of the Internal Revenue rate generally applicable to (35% 4 pursuant to other provisions of the Act).1 This client Code of 1986, as amended (the “Code”)) applies the publication summarizes the new statutory provisions reduced tax rate to QDI by expanding the definition and provides some of our initial observations regard- of net capital gain to include QDI. QDI, however, will not be treated as capital gain for purposes other ing their potential implications for noncorporate in- 5 vestors, corporate finance, capital markets, and merg- than the application of the preferential rate. ers and acquisitions. The new reduced rates will apply to QDI received at Although the portions of the Act summarized below any time during 2003 and to net capital gains taken are relatively not complex, their economic conse- into account only on or after May 6, 2003. However, quences are far-reaching. As a result of the legisla- dividends received by a regulated investment com- tion, many noncorporate investors will have a greater pany (a RIC) or a real estate investment trust (a REIT) before 2003 and distributed to its shareholders preference for investments that generate qualifying 6 dividends compared to investments that produce will not be eligible for the reduced rate. Under a other types of ordinary income (e.g. interest). Corpo- sunset provision, the reduced rates are set to expire in rations will likely respond to this preference by re- 2009, at which point the old rates applicable to net evaluating and possibly modifying their own capital capital gains and dividends would apply (subject of structures. We also believe that the legislation may course to any future statutory amendment). make some financial products relatively more attrac- tive to such investors (e.g. preferred stock mutual funds) and may also spawn new types of financial products intended to cater to the changes in both in- 2 vestor preferences and corporate financing objec- Gain generally will be treated as long-term if the relevant asset is held for more than one year. Short-term capital gains will be tives. We also expect changes, among both the fi- taxed at higher rates generally applicable to ordinary income. nancial industry and the federal government, in ap- 3 proaching and analyzing certain corporate and cross- The 5% rate is scheduled to reduce to 0% in 2008, and will apply to individuals who otherwise are taxed at a rate below border transactions in which the previous disparity in 25% (i.e. who are in the 10% or 15% rate brackets). These rates tax rates between dividends and capital gains on also will apply for purposes of the (the stock was relevant. “AMT”). 4 Unless otherwise indicated, all section references are to the Code.

5 For example, a non-United States person who does not conduct business in the United States and who receives a dividend from 1 a domestic corporation will continue to be subject to withhold- Throughout almost the entire history of federal income tax law, ing tax at a rate of 30%, subject to reduction pursuant to an ap- long term capital gains have been taxed at various degrees of plicable income tax treaty. Also, QDI will not offset a net capi- preference to dividends and other ordinary income. One excep- tal loss. tion is the period from 1988 through 1990, when long term capi- tal gains were taxed at the same rates as ordinary income (in- 6 In the case of RICs and REITs, other special rules apply and are cluding dividends). discussed below. 2

The Act also accelerated reductions in rates appli- riod beginning on the date that is 60 days before cable to an individual’s ordinary income, other than the date on which such stock becomes ex- QDI. These rate reductions (from 38.6% to 35%, in dividend with respect to such dividend,11 the case of the highest bracket) became applicable • for the years 2003 through 2010. Subject to addi- any dividend on stock to the extent that the tax- tional legislation, however, the maximum tax rate payer is under an obligation (e.g. pursuant to a applicable to such income is scheduled to rise to short sale or otherwise) to make related payments 39.6% in 2011. with respect to positions in substantially similar or related property,12 The new tax rates and their effective dates under the • Act are summarized in the following table: any amount that the taxpayer elects to take into account as investment income under section 163(d)(4)(B) for purposes of figuring its deduc- Calendar Maximum Maximum Maximum tion for investment interest, year ordinary rate on net rate on income tax capital qualified • any dividend from a corporation that is (in either rate gains7 dividend its current or preceding taxable year) exempt from income8 tax under sections 501 or 521 (i.e., a tax-exempt corporation or farmers’ cooperative), 2002 38.6% 20% 38.6% • 9 any amount allowed as a deduction under section 2003 to 35% 15% 15% 591 (relating to dividends paid by mutual savings 2008 banks), or 2009 35% 20% 35% • any dividend described in section 404(k) (i.e. a 2010 35% 20% 35% dividend paid on certain employer securities in a 2011 39.6% 20% 39.6% retirement plan). For purposes of the holding-period exception de- Qualified dividend income. QDI generally includes scribed above, a stockholder’s holding period will dividends10 received from domestic corporations and

“qualified foreign corporations” (“QFCs”) (as such term is defined below). Notwithstanding some legis- 11 The minimum holding period requirement under new section lative proposals that were considered prior to enact- 1(h)(11)(B)(iii)(I) is 15 days longer than a similar requirement ment of the Act, it is not necessary that QDI (even if that would apply to a corporation seeking a dividends-received received from a qualified foreign corporation) be deduction in respect of stock. See section 246(c)(1). In the case derived from earnings and profits that have been sub- of preferred dividends attributable to one or more periods ag- gregating in excess of 366 days, it is possible (while not entirely ject to corporate-level United States income tax. clear) that section 246(c)(2) would apply so as to extend the QDI, however, will not include the following: minimum holding period to over 90 days. New section 1(h)(11)(B)(iii)(I) cross-references section 246(c), but expressly • any dividend on stock that is held by the tax- substitutes in section 246(c)(1) “60 days” for “45 days” each payer for 60 days or less during the 120-day pe- place it appears. Section 246(c)(2), however, invokes the rule in section 246(c)(1)(A) but substitutes “90 days” for “45 days” each place it appears. Pending any future clarification from the government, taxpayers who receive such preferred dividends

7 should be aware of the potential application of the 90-day rule Capital gains realized by taxpayers in the 10% and 15% brack- in section 246(c)(2). ets will be taxed at a rate of 5% in the years 2003 through 2007, and at a rate of 0% in the year 2008. In 2009, the capital gains 12 A substitute dividend payment received in a stock lending and tax rate for taxpayers in both of these brackets returns to 10%. short sale transaction also will not qualify for the preferential

8 rates. In this regard, however, the drafters “expect that individ- As with capital gains, dividends received by taxpayers in the ual taxpayers who receive payments in lieu of dividends from 10% and 15% brackets will be taxed at a rate of 5% in the years these transactions may treat the payments as dividend income to 2003 through 2007, and at a rate of 0% in the year 2008. In the extent that the payments are reported to them as dividend in- 2009, these taxpayers (like those in the higher brackets) will come on their Forms 1099-DIV received for calendar year 2003, once again be taxed on dividends at the ordinary income rates of unless they know or have reason to know that the payments are their respective brackets. in fact payments in lieu of dividends rather than actual divi- 9 For the year 2003, the new 15% rate applies to (i) capital gains dends.” H.R. REP. NO. 108-126, at 43 (2003) (Conference taken into account only on or after May 6 and (ii) qualified Agreement). In addition to this language, the legislative history dividend income received at any point during the year. states that Treasury is expected to issue guidance soon on in- formation reporting with respect to substitute dividend pay- 10 The Act does not alter the definition of a dividend, which is ments, and that the IRS will exercise its discretion to relax the generally a distribution by a corporation of cash or other prop- application of information reporting rules under sections 6042 erty out of its current or accumulated earnings and profits. In and 6045 to brokers and dealers who engage in such transac- certain circumstances, a distribution of stock or a redemption tions on behalf of their customers in the normal course of busi- could be treated as a dividend. ness but “attempt in good faith to comply” with such rules. Id.

3 be tolled for any period in which the stockholder for this purpose.16 Also, while Treasury is expected has “diminished his risk of loss” in respect of the to issue guidance on specific treaties, pending such stock by, for example, entering into a hedging or guidance, any comprehensive United States income derivative transaction. There are specified excep- tax treaty (other than the Barbados treaty) will be tions, however, in the case of certain “qualified cov- deemed satisfactory provided that it has an exchange ered calls” written in respect of stock and also cer- of information program.17 The conferees also intend tain types of put options (and other short positions) that a foreign corporation will be deemed eligible for in respect of stock indexes.13 benefits of such a treaty for purposes of this provision if it would qualify for such benefits with respect to Qualified foreign corporations. QFCs, whose divi- substantially all of its income in the taxable year in dends will be eligible for the preferential reduced rate which the dividend is paid.18 (subject to the exceptions outlined above), include the following foreign corporations: For purposes of the “readily tradable” stock category • discussed above, the precise meaning of the require- a corporation incorporated in a possession of the ment that stock with respect to which the dividend is United States, paid be “readily tradable on an established securities • a corporation eligible for benefits of a comprehen- market in the United States” is unclear. The substan- sive United States income tax treaty that includes tially identical phrase has been used in other Code an exchange of information program,14 and provisions and in several final and proposed Treasury regulation sections,19 and similar concepts regarding • a corporation if the stock with respect to which public trading stock or securities have been applied in the dividend is paid is “readily tradable on an es- other contexts.20 We expect official guidance will be 15 tablished securities market in the United States.” issued in the near future regarding the interpretation of this phrase for purposes of determining whether However, QFCs will not include any foreign cor- publicly traded stock issued by a foreign corporation poration that is (in either its current or preceding (that cannot avail itself of a qualifying United States taxable year in which the dividend was paid) a pas- tax treaty) may give rise to QDI. We expect that sive foreign investment company (a PFIC), a for- such guidance may consider, in determining whether eign personal holding company (a FPHC), or a stock is “readily tradable,” the extent to which it is foreign investment company (a FIC). Accordingly, quoted by brokers or dealers or is part of an offering a dividend will not be eligible for the preferential of stock that is in fact traded on an established securi- rates if it is paid by a foreign corporation that is (i) ties market.21 Under such guidance, an “established a PFIC, FPHC, or FIC, (ii) privately owned and securities market” most likely would include a na- organized in a country that has not entered into a tional securities exchange that is registered under qualifying United States income tax treaty (e.g. section 6 of the Securities and Exchange Act of 1934 Bermuda), or (iii) privately owned and organized (e.g. the NYSE). in a country that has entered into a qualifying treaty, but has failed to qualify for benefits thereof (e.g. because of application of the limitation-on- benefits article of such treaty).

The legislative history of the Act provides some use- ful guidance regarding the treaty-based category of 16 The reasoning was that such “treaty may operate to provide QFCs discussed above. In the legislative history, the benefits that are intended for the purpose of mitigating or elimi- nating double taxation to corporations that are not at risk of conferees have stated that they do not believe the double taxation.” Id. at 42. United States-Barbados income tax treaty will qualify 17 Id.

18 Id.

13 See section 246(c)(4) (flush language); Treas. Reg. § 1.246-5. 19 See, e.g., sections 280G(b)(5)(A), 1042(c)(1)(A), Treas. Reg. §§

14 1.453-3(d)(2), 1.752-2(g)(3), (h)(4), 1.1042-1T; Prop. Treas. Both the Act and its legislative history refer to an exchange of Reg. §§ 5f.163-1(b)(2)(i), 1.280G-1. information “program” rather than an exchange of information article or other treaty provision. This wording could be con- 20 See, e.g., section 897(c)(3) (“regularly traded on an established strued to suggest a requirement for an official information ex- securities market”), 1092(d)(1) (“personal property of a type change arrangement between the United States and the relevant which is actively traded”), 1273(b)(3) (“traded on an established treaty country. Hopefully it will be clarified in forthcoming securities market”), 7704(b) (“traded on an established securi- Treasury guidance. ties market” and “readily tradable on a secondary market (or the

15 substantial equivalent thereof)”), and corresponding Treasury The legislative history indicates that in the case of American regulations. Depository Receipts (ADRs) backed by such stock, the trading requirement will be met if the ADRs are so tradable. H.R. REP. 21 For example, these factors are taken into account in Treas. Reg. NO. 108-126, at 42 n.41 (2003) (Conference Agreement) . § 1.453-3(d)(3).

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Special Rules income. Pursuant to the Act, such recharacterized income will be treated as a corporate dividend for Extraordinary dividends. If an individual receives, purposes of determining whether it will qualify as with respect to any stock, QDI from an extraordi- QDI (and also for other purposes that Treasury may nary dividend within the meaning of section 1059(c) specify in the future). (generally a dividend that is at least 10% (or 5% in the case of preferred stock) of the taxpayer’s ad- Repeal of collapsible corporation rules and other justed tax basis in such stock), then any loss recog- conforming changes. Section 341 was originally nized on a future sale or other disposition of such enacted to address collapsible corporations, which stock will be treated as long-term capital loss to the generally are corporations “formed or availed of extent of such dividends. principally” to acquire dealer property with the objective of having their shareholders realize in- Foreign tax credit calculation. A United States tax- come as capital gains from selling or exchanging payer may be allowed a tax credit for foreign taxes their stock in such corporations. Section 341 paid on QDI. Section 904 generally limits the (along with cross-references to it in the Code) has amount of the foreign tax credit based on the propor- been repealed by the Act, which is consistent with tion of such taxpayer’s foreign source taxable income the elimination of the disparity in rates between to its entire taxable income. Under the new law, the dividends and capital gains. amount of the foreign tax credit allowed against United States income tax imposed on QDI will be Observations decreased proportionately with the reduced United States income tax on such QDI. Revisiting capital structure (debt vs. equity). Every- thing else being equal, investors who are United RICs and REITs. QDI received by a RIC or REIT States individuals, trusts and estates will prefer in- generally will continue to be treated as such when vestments that produce QDI in comparison to other distributed to the shareholders of the RIC or REIT. income-producing investments. To illustrate this As under prior law, a distribution of capital gains point, consider the following simple example involv- recognized by a RIC or REIT will be treated as a ing two domestic corporations with individual share- capital gain dividend, i.e. it will not be QDI. The holders: Corporation A pays $100 of dividends on amount of a RIC’s distribution that is considered to preferred stock, and such dividends are QDI. Corpo- be QDI may not exceed the amount so designated ration B, on the other hand, pays $100 of interest on by the RIC in a written notice to its shareholders its outstanding indebtedness. It is easy to see that an mailed within 60 days after the close of its taxable individual (or trust or estate) who is normally taxed at year. If less than 95% of a RIC’s (or a REIT’s) the highest marginal rate (currently 35%) will prefer gross income (as specially computed)22 consists of to receive the dividends, which would result in $15 of QDI, then (i) the entity must designate the amount tax, rather than the interest, which would result in of its dividend distributions that are QDI and (ii) the $35 of tax. However, corporations, in determining aggregate amount so designated may not exceed the their own capital structures, will take into account aggregate QDI received by the entity for the taxable their own tax (and non-tax)23 objectives that may be year. In the case of a REIT, the amount of QDI somewhat at odds with those of their own stock and deemed received during any taxable year will essen- debt investors. tially be its own net after-tax taxable income, i.e. specifically, the sum of (i) its REIT taxable income In the above example, if Corporation B’s interest for the preceding taxable year over the corporate tax expense is deductible against its current income, the imposed on such income, and (ii) the excess of any interest payment will generate a $35 tax benefit (as- income subject to tax by reason of Treasury regula- suming Corporation B is taxed at the highest mar- tions under section 337(d) (e.g. recognition of built- ginal rate applicable to corporations). On the other in gain on assets realized when the REIT was con- hand, Corporation A will not realize a direct tax verted from a subchapter C corporation) over the benefit from paying the dividend, though, as dis- corporate tax imposed on such income. cussed below, it is not necessary that the dividend be paid out of earnings that have been subject to corpo- Section 306 stock. In general, gain that is recog- rate tax. Accordingly, we would expect, very gener- nized from the sale or other (non-redemption) dis- ally, that a domestic corporation with taxable income position of section 306 stock (e.g. preferred stock received as a stock dividend) is treated as ordinary

23 There are of course significant economic and other non-tax considerations, such as pricing, ratings, capitalization, and ap- 22 Income from sales or other dispositions of stock or securities is plicable regulatory requirements, that will be taken into account included in gross income only to the extent of the excess of net in devising a corporation’s capital structure and, in particular, short-term capital gain over net long-term capital loss. choosing between debt and equity.

5 likely will continue to prefer to pay deductible inter- this result with, for example, a corporation organ- est on its capital, while a corporation in a tax loss ized in a tax haven, provided that it is neither a position (because, for example, of a net operating PFIC, FPHC or FIC and that its stock is readily loss carryover) may prefer to pay qualifying divi- tradable on a United States established securities dends on its capital. market (assuming the tax haven is not a party to a qualifying United States income tax treaty). We believe that many corporations may re-evaluate and perhaps even modify their own capital structures Domestic corporate transactions. We anticipate in order to respond to the changed preferences of changes, both among tax planners and the IRS, in domestic noncorporate investors. As part of this approaching and analyzing transactions involving process, corporations and their tax planners may re- domestic corporations with noncorporate United visit the age-old question of whether an instrument States stockholders. As a result of the Act, the inter- will be treated as debt or equity for United States ests of noncorporate stockholders are now more federal income tax purposes (e.g. in deciding to aligned with those of corporate stockholders, who structure capital as preferred stock or as subordinated generally are entitled to the dividends received de- debt). We have a few observations in this regard. duction. However, there will continue to be a dispar- First, although most cases and other legal authorities ity between these categories of stockholders with in this context have considered whether a purported respect to capital gains, on which corporate stock- debt instrument should be respected as such, there are holders will continue to be taxed at the higher rates a few authorities that have analyzed the “reverse” (generally 35%).26 situation, i.e. whether purported equity, such as pre- In light of these altered stockholder preferences, we ferred stock with debt-like terms and conditions, expect that domestic corporations (with primarily should be respected as such, for example, in the con- United States stockholders) and their tax planners text of corporate shareholders seeking a dividends may reconsider structuring financial transactions, received deduction under section 243.24 Second, for- mergers and acquisitions, spin-offs and restructurings eign corporations that are QFCs may consider issuing so as to extract value as QDI rather as capital gain, so-called “hybrid” instruments that are treated as eq- although capital gain treatment will continue to be uity for United States federal income tax purposes preferable in many cases because it allows for a and as indebtedness (that may give rise to deductible stockholder’s tax basis to offset any amount real- interest) for local law purposes. Third, depending on ized.27 For example, straightforward dividends may the investor base and other facts, the IRS may have a be re-evaluated in lieu of share repurchase programs. reduced incentive as a result of the Act to seek to Corporations may consider funding significant divi- recharacterize purported debt as equity due to offset- dends by leveraging (e.g. recapitalizing) or by selling ting revenue effects. That is (using the above exam- an unwanted business. In the case of a privately held ple), if Corporation B’s interest payment is recharac- corporation, one or more significant domestic stock- terized as a dividend, the IRS’s $35 revenue gain holders (e.g. private equity investors) who are inter- from Corporation B’s lost deduction generally would ested in selling their stakes may consider having the be offset by a $20 revenue loss due to the treatment corporation pay them a significant dividend prior to by the investors (assuming they are United States the sale.28 Also, planners may consider structuring individuals, trusts and estates). Possibility of one level of tax on corporate earn- ings. An earlier legislative proposal would have 26 And a third category of stockholders, foreign stockholders not required that dividends eligible for the preferential engaged in a United States business, generally will prefer capi- rates be paid out of earnings that have been fully tal gains (which in most circumstances will not be taxed in the taxed by the United States at the corporate level.25 United States) rather than dividends (which will continue to be Significantly, the Act does not include this require- subject to a 30% withholding tax, unless a lower treaty rate ap- plies). ment. Accordingly, it is possible that corporate earnings received by noncorporate stockholders will 27 In this regard, a sizeable body of law that has evolved for the be subject to one level of tax, at a rate of only 15%. purpose of distinguishing between dividends and capital gain on stock transactions. See, e.g., sections 302, 304, 305 and 306 and Under the new law, it may be possible to achieve related Treasury regulations; Clark v. Commissioner, 489 U.S. 726 (1989) (applying section 302 principles to determine if gain recognized by shareholder in reorganization will be recharacter- ized as dividend). While the stakes may now be lower as a re- 24 See, e.g., Rev. Rul. 90-27, 1990-1 C.B. 50 (dutch-auction rate sult of the elimination of the rate disparity, the applicable law preferred stock was respected as equity). will continue to have potential significance, in part because a

25 stockholder’s tax basis will offset the amount realized in capital The proposal also would have provided that to the extent a gain transactions but not in dividend transactions. corporation retains (rather than distributes) taxed earnings, stockholders would have an upward adjustment in the tax basis 28 In this context, rules applicable to extraordinary dividends may in their stock of the corporation. need to be considered.

6 acquisitive and divisive corporate transactions (i.e., in the AMT exemption, that relief is limited to the mergers, acquisitions and spin-offs), to the extent years 2003 and 2004. such transactions are taxable to stockholders, in ways With the reduction in the long-term capital gains rate so that any boot, income or gain recognized by such to 15%, certain tax-deferral strategies may lose some stockholders will be QDI or capital gain rather than of their attractiveness. For example, the benefits of any other type of income. charitable remainder trusts may no longer provide Cross-border tax planning. The new law may pre- sufficient incentives for many individuals who are sent some planning opportunities in the international not primarily motivated by the charitable aspects of context. On the question of choice of entity, for ex- such trusts. ample, compare a QFC with a foreign entity that is The Act suggests that some types of investment and treated for United States federal income tax purposes savings strategies should be re-evaluated. When as a partnership. Repatriated earnings of the QFC leveraging an investment in stock that generates QDI, that are QDI received by noncorporate United States for example, an investor may choose either (i) to in- stockholders would be taxed at the preferential rates. clude such income as investment income, thereby On the other hand, United States equity investors in potentially increasing the deductible amount of inter- the partnership generally would be taxed at the high- est under section 163(d), or (ii) to apply the preferen- est applicable rates in respect of their allocable shares tial rate to such income, which may be advantageous of the partnership’s ordinary income, regardless of in a situation where the investor has sufficient in- whether or when it is distributed to them. vestment income from other sources. As discussed above, the QFC need not pay any The attractiveness of an investment in a specific mu- United States tax in order for the stockholder to avail tual fund will largely depend on the composition of itself of the benefit. Also, it is possible that the QFC the fund’s income. If 5% or more of the fund’s in- could be subject to zero or relatively low income tax come consists of income other than QDI (i.e. interest in its own jurisdiction because, for example, (i) it is income, non-QDI, and short-term capital gains), the organized in a tax haven, (ii) its income is sheltered portion of the fund’s dividends that are derived from at least in part by significant deductions (e.g. de- such income will not be eligible for the preferential ductible interest on a hybrid instrument such as dis- rate. Thus, pure domestic equity funds (particularly cussed below), or (iii) it is treated as a passthrough those concentrated with dividend-paying preferred entity by its country of organization (i.e. a reverse stocks) may appear more attractive in this regard hybrid entity).29 As mentioned above, foreign corpo- relative to fixed income, hybrid, and many interna- rations that qualify as QFCs may consider the poten- tional equity funds. In addition, distributions re- tial use of hybrid instruments, which could pay out ceived from IRAs (and other tax-deferred accounts) QDI to noncorporate United States stockholders will not be treated as QDI and thus will not be eligi- while possibly generating deductible interest for pur- ble for the preferential rate. poses of its local income taxation. * * * Individual tax planning. In light of the scheduled sunset of the reduced rates, domestic individual tax- Please feel free to contact any of the partners in our payers may want to consider accelerating (perhaps Tax Group or Private Clients Group if you have fur- shortly before the sunset) their recognition of oth- ther questions regarding the Act or any other matter erwise deferred or deferrable income, particularly discussed in this memorandum, including in the con- capital gains and amounts that would be treated as text of a particular transaction. QDI. However, any income acceleration strategy should be evaluated on a case-by-case basis because in many situations, continued deferral of income may be preferable to acceleration.30 Likewise, tax planners for individuals should be sensitive to the AMT. Although the Act provides a slight increase

29 We note that an entity treated as a passthrough in its own coun- try generally would not be able to rely on the applicable income tax treaty and accordingly would need to meet the “readily trad- able” stock requirement in order to qualify as a QFC. Also, planners must be sensitive to the potential application of the subpart F rules. 30 Also, the sunset provisions may be amended.

This memorandum is intended only as a general discussion of these issues. It should not be regarded as legal advice. We would be pleased to provide additional details or advice about specific situations if desired. For more information on the topics covered in this issue, please contact:

Roger J. Baneman Peter H. Blessing Laurence E. Crouch Tax Group, New York Office Tax Group, Munich Office Tax Group, Menlo Park Office (212) 848-4894 (011-49-89) 23888-2115 (650) 838-3718 [email protected] [email protected] [email protected]

Don J. Lonczak Edward J. Park C. Jones Perry, Jr. Tax Group, New York Office Tax Group, New York Office Private Clients Group, New York Office (212) 848-4376 (212) 848-4481 (212) 848-8854 [email protected] [email protected] [email protected]

Bernie J. Pistillo, Jr. Robert A. Rudnick Michael B. Shulman Tax Group, London Office Tax Group, Washington, D.C. Office Tax Group, Washington, D.C. Office (011-44-20) 7655-5040 (202) 508-8020 (202) 508-8075 [email protected] [email protected] [email protected]

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