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General Growth Properties, Inc Message Board

  • we_never_close we_never_close Nov 10, 2010 1:13 PM Flag

    cost basis of hhc

    Are you guys using GGP $14.00 and HHC $36.50 to proportion your cost basis?

    1. Consequences of the Spinco Share Distribution
    As stated above, the Plan Debtors have sought a private letter ruling from the IRS
    to the effect that the Spinco Share Distribution constitutes a reorganization under section 368(a)
    and section 355 of the Tax Code. However, even if obtained, the continued validity of such a
    ruling will be subject to the accuracy of the factual representations and assumptions therein.
    Assuming the receipt and continued validity of such a ruling, a holder of GGP Common Stock
    will not recognize taxable income upon the receipt of Spinco Common Stock pursuant to the
    Spinco Share Distribution. Each such holder will allocate its basis in its GGP Common Stock
    between such GGP Common Stock and the Spinco Common Stock received in the Spinco Share
    Distribution in proportion to the relative fair market value of each immediately after the Spinco
    Share Distribution. A holder’s holding period in its Spinco Common Stock will include the
    holding period of the GGP Common Stock with respect to which the distribution of the Spinco
    Common Stock was made, provided that such GGP Common Stock is held by the holder as a
    capital asset on the date of the Spinco Share Distribution.

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