Contract analysis

I. BACKGROUND — ORGANIZATIONAL AND SYNDICATION COSTS A. Formation of Ironside Capital Management LP Ironside Capital Management LP was formed as a Delaware limited partnership on June 14, 2016, pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101 et seq. The Certificate of Limited Partnership was filed with the Delaware Secretary of State on that date and assigned File Number 6142857.

II. LEGAL FRAMEWORK — IRC §§ 709 AND 195 A. Organizational Expenses Under IRC § 709

Section 709(b)(1) of the Internal Revenue Code permits a partnership to elect to deduct organizational expenses in accordance with a specific statutory framework. Under IRC § 709(b)(1)(A), a partnership may elect to deduct up to $5,000 of organizational expenses in the taxable year in which the partnership begins business. This $5,000 amount is reduced (but not below zero) by the amount by which the total organizatio

III. FACTUAL BASIS FOR ICM'S CLASSIFICATION OF THE $680,000 A. Nature of the Costs at Issue The $680,000 in formation-year costs that are the subject of the Service's inquiry consists of three principal categories of professional fees, all of which were incurred during the period from approximately March 2016 through August 2016 in direct connection with the creation and organization of ICM as a Delaware limited part

1. Legal Fees for Drafting and Negotiating the Limited Partnership Agreement The largest component of the $680,000 consists of legal fees paid to outside counsel for the drafting, negotiation, and finalization of the Amended and Restated Limited Partnership Agreement of Ironside Capital Management LP (the "LPA"), dated June 14, 2016. These legal services encompassed the full scope of work necessary to establish the f

2. Legal Fees for Filing, Registration, and Registered Agent A second component of the $680,000 consists of legal fees incurred in connection with the preparation and filing of the Certificate of Limited Partnership with the Delaware Secretary of State, the filing of the Application for Authority to do business in the State of New York, and the establishment of the registered agent relationship with Capitol Statutory

3. Accounting and Tax Advisory Fees The third component of the $680,000 consists of accounting and tax advisory fees paid to Borwick Craine & Associates LLP (Engagement Partner, Audit: Sandra Whitmore, CPA) for services rendered in establishing the Partnership's initial accounting and tax reporting framework. These services included, but were not limited to: • Designing the Partnership's chart of accounts to accommod

IV. ITEM-BY-ITEM RESPONSE TO IDR #4 Set forth below is ICM's response to each of the eight items requested in IDR #4, together with identification of the enclosed exhibits responsive to each item. Item 1. Request: Copies of all invoices from legal counsel relating to the formation of ICM in 2016. Response: Enclosed as Exhibit A are copies of all invoices from outside legal counsel relating to the formation of ICM in

V. SUMMARY OF ICM'S POSITION Based on the foregoing analysis and the documentation enclosed herewith, ICM respectfully submits that the $1,420,000 in formation-year costs claimed as organizational expense deductions under IRC § 709(b) was properly classified in all respects. The entirety of the amounts claimed consists of costs incident to the creation of the Partnership itself — principally legal fees for drafting a