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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

TO: Leonard Cross, Responsible Partner, Tax Sylvia Hartwell, Billing Partner, Tax

FROM: Robert Jansen, Lead Associate, Tax Garrett Simmons, Working Associate, Tax

DATE: June 16, 2025

RE: Master Tax Analysis — Solara Digital Infrastructure LP Cross-Border Fund-Platform Reorganization

ENGAGEMENT: 20250527-SDILP-PLR

CLIENT: Solara Digital Infrastructure LP

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I. EXECUTIVE SUMMARY

This memorandum sets forth a comprehensive analysis of the United States federal income tax consequences of the proposed multi-step cross-border reorganization of the Solara Digital Infrastructure LP ("Solara" or "SDILP") fund platform (the "Reorganization"). Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") was engaged by Solara on May 12, 2025, and the matter was formally opened on May 27, 2025, under Engagement Number 20250527-SDILP-PLR. The primary purpose of the engagement is to prepare and submit a private letter ruling ("PLR") request to the Internal Revenue Service ("IRS"), Office of the Associate Chief Counsel (International) ("CC:INTL"), which has primary jurisdiction over the cross-border aspects of the proposed transaction, with secondary jurisdiction vested in the Office of the Associate Chief Counsel (Passthroughs and Special Industries) ("CC:PSI") with respect to the partnership-specific provisions implicated by the Reorganization.

The Reorganization involves the domestication and merger of four offshore fund vehicles — two Cayman Islands exempted limited partnerships and two Luxembourg special limited partnerships (sociétés en commandite spéciale, or "SCSps") — into a newly established Delaware-domiciled master fund structure, to be known as Solara Consolidated Master Fund LP (the "Consolidated Master Fund" or the "Master Fund"). The offshore vehicles to be reorganized are collectively referred to herein as the "Legacy Offshore Vehicles." The Reorganization is designed to consolidate the existing parallel fund structure into a streamlined master-feeder architecture, while preserving the tax-efficient positioning of Solara's diverse investor base, which includes United States taxable investors, United States tax-exempt institutional investors (including public pension funds and university endowments), and non-U.S. investors (including a sovereign wealth fund and a Singapore-domiciled insurance company).

The transaction implicates multiple provisions of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC"), including: IRC § 721(a) (nonrecognition of gain on contributions to partnerships), IRC § 721(b) (investment company exception), IRC § 731(a) (nonrecognition of gain on partnership distributions), IRC § 731(c) (marketable securities treated as money), IRC § 752 (treatment of certain partnership liabilities), IRC § 704(c) (allocations with respect to contributed property), IRC § 367 (transfers to and from foreign corporations — inapplicability analysis), IRC § 1446 (withholding on effectively connected taxable income allocable to foreign partners), IRC § 897 (disposition of investment in United States real property — FIRPTA), and the entity classification regulations under Treasury Regulations § 301.7701-3 (check-the-box rules).

The aggregate financial dimensions of the Reorganization are substantial. The total fair market value ("FMV") of assets to be transferred to the Consolidated Master Fund is approximately $7.75 billion. The total aggregate adjusted tax basis of such assets is approximately $6.03 billion, yielding a total aggregate built-in gain of approximately $1.72 billion. Aggregate liabilities to be assumed by the Consolidated Master Fund total approximately $1.34 billion. The Reorganization encompasses 23 portfolio companies across all fund vehicles — 11 held by the Fund IV complex and 12 held by the Fund V complex. The portfolio spans digital infrastructure assets including data center operations, fiber-optic network infrastructure, edge computing platforms, and enterprise SaaS businesses.

Based on the analysis set forth in this memorandum and in the companion memoranda referenced in Section XX below, it is our conclusion that the Reorganization should qualify for tax-free treatment under the relevant provisions of the Code, subject to certain risk areas identified herein, most notably in connection with the marketable securities characterization under IRC § 731(c), the complexity of the liability shifting analysis under IRC § 752, and the FIRPTA implications for non-U.S. investors with respect to portfolio company interests that may constitute United States real property interests.

We recommend that Solara request all eight specific rulings described in Section XVII below from the IRS to confirm the intended tax treatment of the Reorganization. Given the magnitude of the transaction, the cross-border dimension, and the diversity of the investor base, obtaining a PLR will provide critical certainty for all stakeholders and their respective advisors. The target date for submission of the PLR request is August 15, 2025, to the attention of CC:INTL, 1111 Constitution Avenue NW, Washington, DC 20224. We have requested a pre-submission conference with IRS CC:INTL Branch 1 for July 22, 2025, to present the core issues and gauge the IRS's receptivity to the requested rulings before the formal submission.

This memorandum is intended to serve as the master analytical framework for the Reorganization. It summarizes analyses that are developed in substantially greater detail in fourteen separate companion memoranda, each addressing a specific Code section or topic individually. The companion memoranda are listed in Section XX of this memorandum. Each companion memorandum is intended to be read in conjunction with this master memorandum, and cross-references between this memorandum and the companion memoranda are provided throughout.

II. BACKGROUND AND PARTIES

A. Solara Digital Infrastructure LP — Overview

Solara Digital Infrastructure LP ("Solara," "SDILP," or the "Sponsor") is a Delaware limited partnership formed on March 17, 2014, under the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101 et seq. Solara maintains its principal office and headquarters at 1200 Market Street, Suite 3400, Wilmington, Delaware 19801. Its Employer Identification Number is 82-4917366.

As of March 31, 2025, Solara manages assets under management ("AUM") of approximately $14.7 billion across its fund platform. The firm's core investment strategy is the sponsorship of private equity funds targeting digital infrastructure, with a particular focus on four verticals: (i) data center development and operations, (ii) fiber-optic network infrastructure, (iii) edge computing and distributed infrastructure, and (iv) enterprise software-as-a-service ("SaaS") platforms. Solara has established itself as a leading specialist manager in the digital infrastructure private equity space, with a track record spanning two completed fund cycles and two active funds.

The Managing Partner and Founder of Solara is Viktor Raines, age 52, who founded the firm after serving as a managing director at Havensgate Capital Partners, a diversified private equity sponsor. The remainder of the senior management team includes:

• Chief Operating Officer: Meredith Tsao

• Chief Financial Officer: Douglas Wexford

• General Counsel: Priya Narasimhan

• Head of Tax: Stefan Dalmqvist

Mr. Dalmqvist serves as the firm's primary internal tax contact for purposes of this engagement and has been designated by Ms. Narasimhan as the authorized representative for day-to-day communications with Calderwood & Harkness regarding the PLR request and the Reorganization.

B. General Partner

Solara Digital Infrastructure GP LLC ("Solara GP") is a Delaware limited liability company, EIN 82-4917365, which serves as the general partner of SDILP and the existing Delaware-domiciled fund vehicles (Fund IV LP and Fund V LP). Solara GP is managed by Viktor Raines in his capacity as the sole managing member. Solara GP's registered agent in the State of Delaware is Capitol Registered Agents Inc., located at 850 New Burton Road, Suite 201, Dover, Delaware 19904. The partnership agreement of each Delaware fund vehicle designates Solara GP as the general partner with customary authority to manage the affairs of the partnership, including the authority to effect the transactions described in this memorandum, subject to the consent requirements discussed in Section XVIII.F below.

C. Existing Fund Vehicles (Legacy Offshore Vehicles Subject to Reorganization)

Solara's fund platform currently consists of six parallel fund vehicles, organized across three jurisdictions (Delaware, the Cayman Islands, and Luxembourg), to accommodate the distinct tax, regulatory, and reporting requirements of Solara's three principal investor pools: (i) U.S. taxable investors (accommodated through the Delaware main funds), (ii) U.S. tax-exempt investors (accommodated through the Cayman Islands parallel vehicles, which employ UBTI blocker structures), and (iii) non-U.S. investors (accommodated through either the Cayman Islands or Luxembourg parallel vehicles, depending on treaty and regulatory considerations applicable to the specific investor). The existing fund vehicles are organized into two fund complexes — Fund IV and Fund V — each of which includes one Delaware main fund and two offshore parallel vehicles. The four offshore vehicles are the subjects of the Reorganization.

1. Fund IV Complex. The Fund IV complex consists of three vehicles, established as a single vintage with a 2021 closing. As of the date of this memorandum, the Fund IV complex is approximately 72% deployed.

Solara Digital Partners Fund IV LP ("Fund IV" or "Fund IV LP"): Fund IV is a Delaware limited partnership, EIN 85-2103748, with a total fund size of $4.2 billion. Solara GP serves as the general partner. Fund IV is the primary vehicle for U.S. taxable investors in the Fund IV vintage. Fund IV LP is not a subject of the Reorganization — it will continue to exist as a Delaware limited partnership and will co-invest alongside the Consolidated Master Fund following the Reorganization. However, Fund IV LP's co-investment relationships with certain portfolio companies (e.g., NovaBright Data Systems Inc. and Veridian Edge Computing Corp.) and its position as the primary borrower under the Fund IV subscription credit facility are directly relevant to the analysis herein.

Solara Digital Partners Fund IV-A (Cayman) LP ("Fund IV-A Cayman" or "Fund IV-A"): Fund IV-A is a Cayman Islands exempted limited partnership, holding a U.S. EIN of 98-6241503 and bearing Cayman Islands Monetary Authority ("CIMA") registration number MF-72491. The total fund size of Fund IV-A is $1.85 billion. Its registered office is maintained at Harborstone Corporate Services Ltd., P.O. Box 2714, 94 Solaris Avenue, George Town, Grand Cayman, KY1-1111, Cayman Islands. The general partner of Fund IV-A is Solara Offshore GP Ltd., a Cayman Islands exempted company. Fund IV-A serves as the parallel fund for non-U.S. investors and certain U.S. tax-exempt investors in the Fund IV vintage. Fund IV-A Cayman is one of the four Legacy Offshore Vehicles that is a subject of the Reorganization.

Solara Digital Partners Fund IV-B (Luxembourg) SCSp ("Fund IV-B Lux" or "Fund IV-B"): Fund IV-B is a Luxembourg special limited partnership (société en commandite spéciale), organized under the Luxembourg law of July 12, 2013, on sociétés en commandite spéciale. Fund IV-B holds a U.S. EIN of 98-6241571 and is registered with the Luxembourg Registre de Commerce et des Sociétés ("RCS") under number B 248193. The total fund size of Fund IV-B is €1.15 billion, which at the uniform EUR/USD exchange rate of 1.08 applied throughout this memorandum, is equivalent to approximately $1.24 billion. The registered office of Fund IV-B is located at 14, rue Jean-Pierre Brasseur, L-1258 Luxembourg. The general partner of Fund IV-B is Solara Luxembourg Management S.à r.l., a Luxembourg société à responsabilité limitée, RCS number B 248194. Fund IV-B was established to accommodate non-U.S. investors — particularly European institutional investors — for whom the Luxembourg SCSp structure provided advantages related to European tax treaty networks and regulatory familiarity. Fund IV-B Lux is one of the four Legacy Offshore Vehicles that is a subject of the Reorganization.

2. Fund V Complex. The Fund V complex likewise consists of three vehicles, established as a single vintage with a 2023 closing. As of the date of this memorandum, the Fund V complex is approximately 38% deployed, reflecting its more recent vintage.

Solara Digital Partners Fund V LP ("Fund V" or "Fund V LP"): Fund V is a Delaware limited partnership, EIN 88-3467219, with a total fund size of $5.6 billion. Solara GP serves as the general partner. Fund V is the primary vehicle for U.S. taxable investors in the Fund V vintage. Like Fund IV LP, Fund V LP is not a subject of the Reorganization; it will continue to exist and will co-invest alongside the Consolidated Master Fund.

Solara Digital Partners Fund V-A (Cayman) LP ("Fund V-A Cayman" or "Fund V-A"): Fund V-A is a Cayman Islands exempted limited partnership, U.S. EIN 98-7891234, CIMA registration number MF-89103, with a total fund size of $2.45 billion. Its registered office is maintained at Harborstone Corporate Services Ltd., George Town, Grand Cayman, Cayman Islands. Fund V-A Cayman is a Legacy Offshore Vehicle subject to the Reorganization.

Solara Digital Partners Fund V-B (Luxembourg) SCSp ("Fund V-B Lux" or "Fund V-B"): Fund V-B is a Luxembourg SCSp, U.S. EIN 98-7891267, RCS number B 271056, with a total fund size of €1.38 billion (approximately $1.49 billion at 1.08 EUR/USD). Its registered office is located at 14, rue Jean-Pierre Brasseur, L-1258 Luxembourg. Fund V-B Lux is a Legacy Offshore Vehicle subject to the Reorganization.

D. Newly Formed Entities (Post-Reorganization)

The Reorganization contemplates the formation of four new entities, which will collectively constitute the post-Reorganization master-feeder structure:

Solara Consolidated Master Fund LP (the "Master Fund"): The Master Fund will be a Delaware limited partnership, to be formed under the Delaware Revised Uniform Limited Partnership Act. The Master Fund will serve as the central consolidated vehicle, receiving the portfolio company assets from each of the four Legacy Offshore Vehicles through the contribution transactions described in Steps 2 through 4 of the Reorganization. Following completion of the Reorganization, the Master Fund will hold all 23 portfolio companies formerly held by the Legacy Offshore Vehicles. It will be classified as a partnership for U.S. federal income tax purposes.

Solara Consolidated Master Fund GP LLC (the "Master Fund GP"): The Master Fund GP will be a Delaware limited liability company, to be formed contemporaneously with the Master Fund. It will serve as the general partner of the Master Fund. Viktor Raines will serve as the managing member of the Master Fund GP.

Solara International Feeder (Cayman) LP (the "International Feeder" or "Int'l Feeder"): The International Feeder will be a Cayman Islands exempted limited partnership, to be formed under the Cayman Islands Exempted Limited Partnership Act. The International Feeder will serve as the feeder vehicle for non-U.S. investors investing into the Master Fund. Following the Reorganization, non-U.S. limited partners currently invested through Fund IV-A Cayman and Fund V-A Cayman (including the Nordhaven Sovereign Wealth Fund) and through Fund IV-B Lux and Fund V-B Lux (including Kestrel Pacific Insurance Group) will hold their interests in the Master Fund indirectly through the International Feeder.

Solara Tax-Exempt Feeder (Cayman) LP (the "Tax-Exempt Feeder" or "TE Feeder"): The Tax-Exempt Feeder will be a Cayman Islands exempted limited partnership, to be formed contemporaneously with the International Feeder. The Tax-Exempt Feeder will serve as the feeder vehicle for U.S. tax-exempt investors (including public pension funds and university endowments) investing into the Master Fund, with the objective of mitigating unrelated business taxable income ("UBTI") concerns under IRC §§ 511–514 that would otherwise arise from direct investment in a leveraged partnership.

All four newly formed entities will file IRS Form 8832 elections under Treasury Regulations § 301.7701-3 to be classified as partnerships for U.S. federal income tax purposes. The timing and coordination of these elections are discussed in Section XIII below.

E. Representative Limited Partners

The following table sets forth the principal limited partners of the Solara fund platform that are representative of the investor categories affected by the Reorganization. This table is not exhaustive but identifies the key investors whose tax positions have been considered in the preparation of this analysis and the PLR request.

The Pinnacle State Employees' Retirement System and Grandview University Endowment are representative of U.S. tax-exempt investors whose primary concern in the Reorganization is the avoidance of UBTI. The Nordhaven Sovereign Wealth Fund is representative of non-U.S. sovereign investors whose primary concerns include U.S. withholding tax obligations under IRC § 1446, FIRPTA exposure under IRC § 897, and applicable treaty benefits. Kestrel Pacific Insurance Group is representative of non-U.S. corporate investors with similar withholding and FIRPTA concerns, as well as considerations under the Singapore-U.S. income tax treaty. Argyle Family Office Holdings LLC is representative of U.S. taxable investors whose primary concern is the preservation of basis and the avoidance of current gain recognition.

F. Advisors and Third Parties

The following firms and individuals are serving as advisors to the parties or are otherwise involved in the Reorganization in material capacities:

Calderwood & Harkness LLP — U.S. tax counsel to Solara Digital Infrastructure LP. The engagement team consists of Leonard Cross (responsible partner), Sylvia Hartwell (billing partner), Robert Jansen (lead associate), and Garrett Simmons (working associate). Calderwood & Harkness has been engaged to prepare the PLR request and to provide comprehensive U.S. federal income tax advice in connection with the Reorganization.

Whitfield, Carruthers & Doyle LLP (Diana Carruthers, lead partner) — Outside counsel to the Limited Partner Advisory Committee ("LPAC"). Whitfield, Carruthers & Doyle has been engaged by the LPAC to review the terms of the Reorganization on behalf of the limited partners and to provide an independent assessment of the tax analysis. Ms. Carruthers has been provided with access to certain prior drafts of the PLR request and is expected to provide comments on PLR Draft v3.0 by July 15, 2025.

Bramhall & Quelwick LLP (Jason Tremaine, lead partner) — Independent U.S. tax counsel retained separately by the Nordhaven Sovereign Wealth Fund for the purpose of analyzing U.S. withholding tax obligations, treaty benefits, and FIRPTA implications specific to the Nordhaven SWF's position in the Reorganization. Coordination between Calderwood & Harkness and Bramhall & Quelwick is ongoing, and certain representations in the PLR request may need to be reviewed by Mr. Tremaine prior to submission.

Meridian Offshore Legal (Fiona McAllister, lead counsel) — Cayman Islands counsel, engaged to advise on the formation and CIMA registration of the two new Cayman feeder entities (International Feeder and Tax-Exempt Feeder), the dissolution of Fund IV-A Cayman and Fund V-A Cayman, and the deregistration of CIMA registrations MF-72491 and MF-89103. Meridian Offshore Legal also serves as local counsel for purposes of confirming the Cayman Islands tax and regulatory treatment described in Section XV below.

Veldhuis & Gérard S.à r.l. (Marc Gérard, lead counsel) — Luxembourg counsel, engaged to advise on the dissolution and wind-down of Fund IV-B Lux (RCS B 248193) and Fund V-B Lux (RCS B 271056), including Luxembourg tax treatment of the asset contributions and CSSF notification requirements. Veldhuis & Gérard's analysis of Luxembourg tax consequences is summarized in Section XIV below.

Caldwell Pierce & Co. LLP (Helen Okamoto, engagement partner) — Independent accounting firm providing annual audit and tax compliance services for all Solara fund vehicles. Caldwell Pierce is furnishing the adjusted tax basis records, historical capital account data, and supporting financial documentation required for the PLR exhibits.

Redstone Advisory Group LLC (Marco DeLuca, managing director) — Transfer pricing and valuation advisory firm, retained to prepare independent FMV appraisals of each portfolio company interest being contributed to the Master Fund. The Redstone appraisals will be submitted as an exhibit to the PLR request and will serve as the primary support for the FMV figures used throughout this memorandum.

Clarendon Fund Services Ltd. (Rachel Okonkwo, director) — Fund administrator for the offshore vehicles, responsible for NAV calculations, investor reporting, and coordination of the LP migration process in Step 5 of the Reorganization.

Ashford National Bank, N.A. (Thomas Greenleaf, managing director, Fund Finance) — Subscription credit facility lender for both Fund IV ($1.1 billion facility) and Fund V ($1.5 billion facility, co-lent with Sentinel Capital Markets LLC). The treatment of the subscription credit facilities under IRC § 752 is discussed in Section IX.C below.

Sentinel Capital Markets LLC (Laura Pak, senior vice president) — Co-lender and administrative agent under the Fund V subscription credit facility. Sentinel's consent to the Reorganization may be required under the terms of the credit agreement, and coordination with Sentinel regarding the impact of the Reorganization on the borrowing base and collateral structure is ongoing.

Hawkstone Specialty Insurance Co. (Neil Braddock, underwriting director) — Provider of directors' and officers' liability insurance and errors and omissions coverage to Solara and its affiliated entities, with an aggregate limit of $50 million. The Reorganization may require notification to Hawkstone under the policy's change-in-control or material transaction provisions.

III. BUSINESS RATIONALE FOR THE REORGANIZATION

The Reorganization is driven by multiple independent and collectively reinforcing business purposes, which are summarized below. As discussed in Section XVI.B of this memorandum, the existence of substantial non-tax business purposes is relevant to the anti-abuse and substance-over-form analyses that the IRS may apply in evaluating the PLR request. While the Reorganization will also yield certain tax efficiencies — principally the simplification of the entity structure and associated tax compliance — each of the business rationales described below independently justifies the transaction on non-tax grounds.

Current Structure. Solara currently maintains six parallel fund vehicles across three jurisdictions — Delaware, the Cayman Islands, and Luxembourg — in order to accommodate the distinct needs of its three principal investor pools: (i) U.S. taxable investors, who invest through the Delaware main funds (Fund IV LP and Fund V LP); (ii) U.S. tax-exempt investors, who invest through the Cayman Islands parallel vehicles (Fund IV-A Cayman and Fund V-A Cayman), which employ UBTI blocker structures to address concerns under IRC §§ 511–514; and (iii) non-U.S. investors, who invest through either the Cayman Islands or Luxembourg parallel vehicles (Fund IV-B Lux and Fund V-B Lux), depending on treaty access, regulatory considerations, and investor preference. This parallel structure was originally adopted at the time of Fund IV's formation in 2021 and replicated for Fund V in 2023, reflecting then-prevailing market practice and the specific requirements of the investor base at that time.

Operational Cost Reduction. The maintenance of the parallel offshore structure imposes significant and ongoing operational costs. Solara currently pays approximately $3.8 million annually in duplicative administration, audit, and regulatory fees associated with the Cayman and Luxembourg vehicles. These costs include CIMA annual fees and regulatory filings, Luxembourg RCS annual filings and CSSF notifications, offshore registered office and corporate services fees (Harborstone Corporate Services Ltd. in the Cayman Islands and the Luxembourg registered office), duplicative annual audit fees charged by Caldwell Pierce & Co. LLP for each offshore entity, duplicative fund administration fees charged by Clarendon Fund Services Ltd., and legal compliance costs in multiple jurisdictions. Consolidation into a single master fund with two feeder vehicles will substantially reduce these costs by eliminating the need for separate financial statements, separate audit engagements, and separate regulatory filings for each Legacy Offshore Vehicle.

OECD Pillar Two GloBE Rules. Effective for Solara's Luxembourg entities beginning in fiscal year 2025, the OECD's Pillar Two Global Anti-Base Erosion ("GloBE") rules, as implemented through the EU Minimum Tax Directive (Council Directive (EU) 2022/2523), fundamentally alter the tax landscape for the Luxembourg SCSp structures. The GloBE rules impose a global minimum effective tax rate of 15% on large multinational enterprises, including constituent entities of investment fund structures that meet the relevant revenue thresholds. While the Luxembourg SCSps are themselves tax-transparent for Luxembourg purposes, the application of the GloBE rules to certain Luxembourg-resident constituent entities (including the GP entity, Solara Luxembourg Management S.à r.l.) and the potential application of the Income Inclusion Rule and Undertaxed Profits Rule to Solara's broader structure diminish the tax benefits historically provided by the Luxembourg SCSp structures. As a result, the operational rationale for maintaining separate Luxembourg vehicles has been materially weakened, and the cost-benefit analysis now favors consolidation.

FATCA and CRS Simplification. The current multi-jurisdictional structure imposes substantial compliance burdens under the Foreign Account Tax Compliance Act ("FATCA," IRC §§ 1471–1474) and the Common Reporting Standard ("CRS") promulgated by the OECD. Each offshore entity is independently subject to FATCA registration and reporting obligations, and each Cayman and Luxembourg entity is subject to CRS reporting obligations under its respective local implementing legislation. Consolidation into a master-feeder structure will centralize FATCA and CRS compliance and reduce the number of separately reporting entities, thereby lowering compliance costs and reducing the risk of reporting errors.

LP-Requested Governance Simplification. The limited partners themselves have expressed a desire for simplified governance and reporting across the Solara platform. At the LPAC meeting held on April 22, 2025, at which representatives of each of the five representative investors listed in Section II.E were present or represented by proxy, the LPAC provided preliminary consent to the Reorganization, with affirmative votes representing approximately 78% of total commitments in interest. The limited partners have cited, among other things, the burden of receiving and reviewing separate financial statements, K-1s (or equivalent reporting), and capital account statements from multiple parallel fund vehicles investing in substantially the same portfolio companies. The consolidated structure will allow for unified investor reporting through a single master fund, with feeder-level reporting limited to the allocation of income and expenses between the feeders and the master fund.

Note on Business Purpose. Each of the rationales described above independently constitutes a substantial non-tax business purpose for the Reorganization. Collectively, these rationales provide a compelling basis for the conclusion that the Reorganization is not primarily motivated by tax avoidance and that the tax-free treatment sought under IRC §§ 721 and 731 is consistent with the congressional intent underlying those provisions. This conclusion is relevant to the anti-abuse and step-transaction analysis set forth in Section XVI below, and the PLR request will include a detailed recitation of these business purposes as part of the representations supporting the requested rulings.

IV. DESCRIPTION OF THE PROPOSED REORGANIZATION — FIVE-STEP TRANSACTION

The Reorganization consists of five sequentially executed steps, each of which is described in detail below. The steps are designed to be completed during the fourth quarter of 2025, with a target effective date for completion of December 1, 2025. The sequencing of the steps has been designed to minimize operational disruption, accommodate the timing requirements of the Form 8832 check-the-box elections, and allow for orderly coordination with foreign counsel in the Cayman Islands and Luxembourg.

A. Step 1 — Formation of New Entities (Target: September 15, 2025)

The first step in the Reorganization is the formation of the four new entities that will constitute the post-Reorganization master-feeder structure. The target date for completion of all entity formations is September 15, 2025, which provides a lead time of approximately two weeks before the first contribution transaction in Step 2.

The following entities will be formed:

1. Solara Consolidated Master Fund GP LLC — A Delaware limited liability company, to be formed through Capitol Registered Agents Inc. in Dover, Delaware. The Master Fund GP will serve as the general partner of the Master Fund. Viktor Raines will serve as the sole managing member.

2. Solara Consolidated Master Fund LP — A Delaware limited partnership, to be formed through Capitol Registered Agents Inc. in Dover, Delaware. The Master Fund will be the central consolidated vehicle of the post-Reorganization structure, receiving all portfolio company assets from the Legacy Offshore Vehicles.

3. Solara International Feeder (Cayman) LP — A Cayman Islands exempted limited partnership, to be formed by Meridian Offshore Legal (Fiona McAllister, lead counsel) with Harborstone Corporate Services Ltd. serving as registered office provider. The International Feeder will serve as the feeder vehicle for non-U.S. investors.

4. Solara Tax-Exempt Feeder (Cayman) LP — A Cayman Islands exempted limited partnership, to be formed contemporaneously with the International Feeder by Meridian Offshore Legal, with Harborstone Corporate Services Ltd. serving as registered office provider. The Tax-Exempt Feeder will serve as the feeder vehicle for U.S. tax-exempt investors.

Upon formation, each new entity will file IRS Form 8832 (Entity Classification Election) under Treasury Regulations § 301.7701-3 to elect classification as a partnership for U.S. federal income tax purposes. As discussed in greater detail in Section XIII below, the domestic entities (Master Fund GP LLC and Master Fund LP) default to partnership classification under Treas. Reg. § 301.7701-3(b)(1), and the Form 8832 elections will serve as confirmatory filings. The foreign entities (International Feeder and Tax-Exempt Feeder) are also expected to default to partnership classification under Treas. Reg. § 301.7701-3(b)(2)(i)(A) because at least one member (the general partner) has unlimited liability, but the Form 8832 elections will be filed for certainty. The effective dates of the elections must be coordinated with the subsequent contribution and distribution steps to ensure that each entity is properly classified as a partnership before it participates in any transaction that is intended to be governed by Subchapter K. The 75-day retroactivity rule under Treas. Reg. § 301.7701-3(c)(1)(iii) — which permits an election to be effective up to 75 days prior to the date the election is filed — provides an additional timing cushion in the event of any delays in entity formation.

B. Step 2 — Contribution of Fund IV-A Cayman Assets (Target: October 1, 2025)

In the second step, Solara Digital Partners Fund IV-A (Cayman) LP ("Fund IV-A Cayman") will contribute all of its portfolio company assets to the Solara Consolidated Master Fund LP in exchange for a limited partnership interest in the Master Fund. Fund IV-A Cayman will contribute its entire portfolio in a single transaction, and following the contribution, Fund IV-A Cayman will hold no portfolio assets other than its newly received limited partnership interest in the Master Fund and any residual cash and working capital.

The aggregate financial dimensions of the Step 2 contribution are as follows:

• Aggregate FMV of contributed assets: $2.31 billion

• Aggregate adjusted tax basis of contributed assets: $1.62 billion

• Aggregate built-in gain: $690 million

The key portfolio company interests contributed in Step 2 include the following:

NovaBright Data Systems Inc. — Fund IV-A Cayman holds a 60% equity interest in NovaBright Data Systems Inc. ("NovaBright"), a Delaware corporation that operates a portfolio of data center facilities. The FMV of Fund IV-A's 60% interest is $890 million, the adjusted tax basis is $520 million, and the built-in gain is $370 million. The remaining 40% interest in NovaBright is held by Fund IV LP (the Delaware main fund), which is not a subject of the Reorganization. Following the Reorganization, the Master Fund will hold the 60% interest formerly held by Fund IV-A Cayman, and Fund IV LP will continue to hold the remaining 40% interest directly. The co-ownership of NovaBright between the Master Fund and Fund IV LP is relevant to the § 704(c) and § 752 analyses.

Thorngate Fiber Networks LP — Fund IV-A Cayman holds a 100% interest in Thorngate Fiber Networks LP ("Thorngate"), a Delaware limited partnership that owns and operates fiber-optic network infrastructure. The FMV of Fund IV-A's interest is $670 million, the adjusted tax basis is $490 million, and the built-in gain is $180 million.

The intended U.S. federal income tax treatment of the Step 2 contribution is as follows: The contribution should be treated as a tax-free contribution of property to a partnership in exchange for a partnership interest under IRC § 721(a), with no gain or loss recognized by either Fund IV-A Cayman or the Master Fund. The Master Fund should take a carryover basis in each contributed asset equal to Fund IV-A Cayman's adjusted tax basis at the time of the contribution under IRC § 723. The Master Fund should tack Fund IV-A Cayman's holding period for each contributed asset under IRC § 1223(2).

C. Step 3 — Contribution of Fund IV-B Luxembourg Assets (Target: October 15, 2025)

In the third step, Solara Digital Partners Fund IV-B (Luxembourg) SCSp ("Fund IV-B Lux") will contribute all of its portfolio company assets to the Solara Consolidated Master Fund LP in exchange for a limited partnership interest in the Master Fund. The contribution will be structured identically to the Step 2 contribution, with the additional cross-border dimension arising from the fact that Fund IV-B Lux is a foreign partnership (a Luxembourg SCSp) contributing assets to a domestic partnership (the Master Fund, a Delaware LP).

The aggregate financial dimensions of the Step 3 contribution are as follows:

• Aggregate FMV of contributed assets: €1.07 billion / $1.16 billion at 1.08 EUR/USD

• Aggregate adjusted tax basis of contributed assets: €782 million / $844.6 million

• Aggregate built-in gain: €288 million / $311 million

The key portfolio company interest contributed in Step 3 is:

Crestline Cloud Solutions LLC — Fund IV-B Lux holds a 100% interest in Crestline Cloud Solutions LLC ("Crestline"), a Delaware limited liability company that is treated as a disregarded entity for U.S. federal income tax purposes under Treas. Reg. § 301.7701-3. Crestline operates an enterprise SaaS platform. The FMV of Fund IV-B's interest in Crestline is €340 million ($367 million), the adjusted tax basis is €195 million ($211 million), and the built-in gain is €145 million ($156 million). Because Crestline is a disregarded entity, Fund IV-B Lux is treated as directly owning the assets of Crestline for U.S. federal income tax purposes. Following the contribution to the Master Fund, Crestline's disregarded entity status will continue, with the Master Fund treated as the owner of Crestline's assets.

The intended U.S. federal income tax treatment of the Step 3 contribution is the same as for Step 2: tax-free contribution under IRC § 721(a), with carryover basis under § 723 and holding period tacking under § 1223(2).

The Step 3 contribution involves additional cross-border considerations that do not arise in Step 2:

IRC § 367 Inapplicability. The contribution involves a transfer by a foreign partnership (Fund IV-B Lux, a Luxembourg SCSp) to a domestic partnership (the Master Fund, a Delaware LP). As discussed in detail in Section VII below, IRC § 367 applies by its terms only to transfers involving corporations (both § 367(a) and § 367(b)), and the contributions in Steps 3 and 4 do not involve any corporation as a transferor or transferee. Accordingly, § 367 should not apply to the Step 3 contribution.

IRC § 1446 Withholding. The contribution is a nonrecognition transaction under § 721(a), and no effectively connected taxable income should be generated. Therefore, no withholding under § 1446 should be required in connection with the Step 3 contribution. This analysis is discussed in detail in Section XI below.

Luxembourg Tax Treatment. No Luxembourg capital gains tax is expected at the SCSp level on the contribution of Fund IV-B Lux's assets to the Master Fund. Under Article 3(2) of the Luxembourg law of July 12, 2013, the SCSp is a fiscally transparent entity for Luxembourg tax purposes, and income and gains are attributed to its partners rather than to the SCSp itself. This analysis has been confirmed by Veldhuis & Gérard S.à r.l. (Marc Gérard) and is discussed in detail in Section XIV below.

D. Step 4 — Contribution of Fund V Offshore Assets (Target: November 1, 2025)

In the fourth step, the two remaining Legacy Offshore Vehicles — Fund V-A Cayman and Fund V-B Lux — will each contribute all of their respective portfolio company assets to the Consolidated Master Fund LP in exchange for limited partnership interests in the Master Fund. The two contributions will be executed on the same date (target: November 1, 2025) in two separate but simultaneous transactions.

Fund V-A (Cayman) LP Contribution:

• Aggregate FMV of contributed assets: $2.89 billion

• Aggregate adjusted tax basis of contributed assets: $2.34 billion

• Aggregate built-in gain: $550 million

The key portfolio company interests contributed by Fund V-A Cayman include:

Veridian Edge Computing Corp. — Fund V-A Cayman holds a 55% equity interest in Veridian Edge Computing Corp. ("Veridian"), a Delaware corporation operating edge computing infrastructure. The FMV of Fund V-A's 55% interest is $1.12 billion, the adjusted tax basis is $780 million, and the built-in gain is $340 million. The remaining 45% interest in Veridian is held by Fund V LP, which is not a subject of the Reorganization. The co-ownership structure parallels that of NovaBright, and the same analytical considerations apply.

Helix SaaS Holdings Ltd. — Fund V-A Cayman holds a 100% interest in Helix SaaS Holdings Ltd. ("Helix"), a Cayman Islands exempted company that serves as a holding company for a portfolio of enterprise SaaS businesses. The FMV of Fund V-A's interest is $445 million, the adjusted tax basis is $310 million, and the built-in gain is $135 million.

Fund V-B (Luxembourg) SCSp Contribution:

• Aggregate FMV of contributed assets: €1.29 billion / $1.39 billion at 1.08 EUR/USD

• Aggregate adjusted tax basis of contributed assets: €1.14 billion / $1.23 billion

• Aggregate built-in gain: €150 million / $162 million

The intended U.S. federal income tax treatment of the Step 4 contributions is the same as for Steps 2 and 3: tax-free contribution under IRC § 721(a), with carryover basis under § 723 and holding period tacking under § 1223(2). The same IRC § 367 inapplicability analysis and IRC § 1446 withholding analysis apply to the Fund V-B Lux contribution as to the Fund IV-B Lux contribution in Step 3.

E. Step 5 — Dissolution of Legacy Offshore Vehicles and LP Migration (Target: December 1, 2025)

In the fifth and final step, each of the four Legacy Offshore Vehicles — Fund IV-A (Cayman) LP, Fund IV-B (Luxembourg) SCSp, Fund V-A (Cayman) LP, and Fund V-B (Luxembourg) SCSp — will dissolve and distribute their respective limited partnership interests in the Consolidated Master Fund LP to their existing limited partners in complete liquidation.

Following the contributions in Steps 2 through 4, each Legacy Offshore Vehicle's sole significant asset will be its limited partnership interest in the Master Fund (together with any residual cash and working capital). In the dissolution distributions, each Legacy Offshore Vehicle will distribute its Master Fund interest to its limited partners on a pro rata basis in accordance with each partner's capital account and sharing ratio.

Upon receipt of their respective Master Fund interests, the limited partners of the Legacy Offshore Vehicles will be reallocated to the appropriate feeder vehicle:

• Non-U.S. limited partners (including the Nordhaven Sovereign Wealth Fund and Kestrel Pacific Insurance Group) will contribute their received Master Fund interests to the Solara International Feeder (Cayman) LP in exchange for limited partnership interests in the International Feeder. The International Feeder will in turn hold the aggregated Master Fund interests on behalf of its non-U.S. limited partners.

• U.S. tax-exempt limited partners (including the Pinnacle State Employees' Retirement System and the Grandview University Endowment) will contribute their received Master Fund interests to the Solara Tax-Exempt Feeder (Cayman) LP in exchange for limited partnership interests in the Tax-Exempt Feeder. The Tax-Exempt Feeder will hold the aggregated Master Fund interests on behalf of its U.S. tax-exempt limited partners.

The intended U.S. federal income tax treatment of the Step 5 distributions is as follows: The distributions should be treated as tax-free distributions under IRC § 731(a). Gain is recognized under § 731(a)(1) only to the extent that "money" distributed exceeds the adjusted basis of the partner's partnership interest. The distributed property consists solely of partnership interests (i.e., the Master Fund LP interests), which constitute "property" rather than "money" for purposes of § 731(a)(1), unless the marketable securities rule of IRC § 731(c) applies. As discussed in Section VIII.B below, the Master Fund LP interests do not constitute "marketable securities" under § 731(c)(2), and accordingly the distributions should not trigger gain recognition for any limited partner.

Under IRC § 732, each limited partner will take an exchanged basis in its received Master Fund interest equal to its adjusted basis in its Legacy Offshore Vehicle interest immediately prior to the distribution, adjusted for any deemed distributions under § 752(b) resulting from liability shifts.

The dissolution of the two Cayman vehicles will be coordinated with Meridian Offshore Legal (Fiona McAllister), including the deregistration of CIMA registrations MF-72491 (Fund IV-A Cayman) and MF-89103 (Fund V-A Cayman). The dissolution of the two Luxembourg SCSps will be coordinated with Veldhuis & Gérard S.à r.l. (Marc Gérard), including the cancellation of RCS registrations B 248193 (Fund IV-B Lux) and B 271056 (Fund V-B Lux) and the required notification to the Commission de Surveillance du Secteur Financier ("CSSF").

Resulting Post-Reorganization Structure. Following completion of Step 5, the Solara fund platform will be organized as follows: The Master Fund (a Delaware LP) will hold all 23 portfolio companies formerly held by the Legacy Offshore Vehicles. Two Cayman feeder LPs — the International Feeder and the Tax-Exempt Feeder — will hold limited partnership interests in the Master Fund on behalf of their respective investor constituencies. U.S. taxable investors will remain directly invested in Fund IV LP and Fund V LP (the Delaware main funds), which were not subjects of the Reorganization and will continue to co-invest alongside the Master Fund in their respective portfolio companies.

V. AGGREGATE FINANCIALS OF THE REORGANIZATION

The following table summarizes the aggregate financial dimensions of the Reorganization:

The following table provides a breakdown of FMV, adjusted tax basis, and built-in gain by contributing entity:

All FMV figures are based on the independent appraisals prepared by Redstone Advisory Group LLC (Marco DeLuca, managing director) as of the anticipated valuation date and are subject to final adjustment as of the actual contribution dates. All adjusted tax basis figures are based on tax basis records maintained by Caldwell Pierce & Co. LLP (Helen Okamoto, engagement partner) and reconciled against partnership return data. Reconciliation of FMV and basis figures to the Redstone appraisals and Caldwell Pierce tax-basis records will be completed prior to submission of the PLR request and will be documented in PLR Exhibit D (Valuation Summary) and PLR Exhibit E (Tax Basis Reconciliation).

Representative Portfolio Company Detail

The following table provides detail on the five most significant portfolio companies by built-in gain, which together account for $1.181 billion (approximately 69%) of the total $1.72 billion aggregate built-in gain:

The remaining 18 portfolio companies have an aggregate built-in gain of approximately $539 million. A complete schedule of all 23 portfolio companies, including entity types, jurisdictions, ownership percentages, FMV, basis, built-in gain, and holding vehicle(s), will be included in PLR Exhibit C (Portfolio Company Schedule).

VI. TAX ANALYSIS — IRC § 721 (CONTRIBUTIONS TO PARTNERSHIPS)

A. Section 721(a) — General Nonrecognition Rule

Section 721(a) of the Internal Revenue Code provides that "[n]o gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership." This nonrecognition rule is the foundational provision governing the tax treatment of the contribution transactions in Steps 2, 3, and 4 of the Reorganization.

Application to the Reorganization. In each of Steps 2, 3, and 4, one or more of the Legacy Offshore Vehicles (Fund IV-A Cayman, Fund IV-B Lux, Fund V-A Cayman, and Fund V-B Lux) contributes all of its portfolio company assets to the Consolidated Master Fund LP in exchange for a limited partnership interest in the Master Fund. Each contribution satisfies the three requirements of § 721(a): (i) property is contributed (the portfolio company interests, which constitute "property" within the meaning of the Code), (ii) the contribution is made to a partnership (the Master Fund, a Delaware LP classified as a partnership for U.S. federal income tax purposes under Treas. Reg. § 301.7701-3), and (iii) the contributing entity receives an interest in the partnership in exchange for its contribution (each Legacy Offshore Vehicle receives a limited partnership interest in the Master Fund). No cash or other consideration is received by any Legacy Offshore Vehicle in connection with the contribution, and accordingly there is no "boot" involved in any of the contribution transactions.

It is important to note that the contributing entities in each of Steps 2 through 4 are themselves partnerships (the Cayman exempted LPs and Luxembourg SCSps), not individual partners. Section 721(a), however, is not limited in its application to contributions by individuals. By its terms, the statute applies to contributions of property by "any" partner, and the term "partner" as used in Subchapter K encompasses any person that is a partner in a partnership, including another partnership. See IRC § 7701(a)(2) (defining "partnership" and "partner"). The contribution of property by one partnership to another partnership in exchange for a partnership interest is a well-established application of § 721(a), and the IRS and Treasury Department have not limited the nonrecognition rule to contributions by natural persons or corporations. Partnership-to-partnership contributions are routinely treated as nonrecognition events under § 721(a), and there is no basis in the statute, regulations, or published guidance for a contrary result here.

Carryover Basis. Under IRC § 723, the Master Fund will take a carryover basis in each contributed asset equal to the contributing partnership's adjusted tax basis at the time of the contribution. The total carryover basis across all contributed assets is approximately $6.03 billion, as set forth in the aggregate financials in Section V above. The carryover basis preserves the $1.72 billion in aggregate built-in gain, which will be recognized by the Master Fund (and allocated to its partners, including through the feeder vehicles) upon a future taxable disposition of the contributed assets. The § 704(c) allocation rules, discussed in Section X below, will govern the allocation of this built-in gain among the partners of the Master Fund.

Holding Period Tacking. Under IRC § 1223(2), the Master Fund will tack the contributing partnership's holding period for each contributed asset. This holding period tacking is relevant for purposes of determining whether gain or loss on a future disposition of a contributed asset will be characterized as long-term or short-term capital gain or loss. Given that the Fund IV complex has a 2021 vintage and the Fund V complex has a 2023 vintage, the contributed assets should in most cases have holding periods of at least two years at the time of contribution, and the tacking rule will preserve the long-term character of those holding periods.

Risk Level: Low. The application of § 721(a) to the contribution transactions is straightforward and well-supported by the statutory text, the Treasury Regulations, and published IRS guidance. Nevertheless, because of the extraordinary magnitude of the built-in gain ($1.72 billion), the cross-border dimension, and the complexity of the multi-step transaction, we recommend seeking Ruling 1 to confirm the nonrecognition treatment.

B. Section 721(b) — Investment Company Exception

Section 721(b) provides an exception to the general nonrecognition rule of § 721(a). Specifically, § 721(b) states that § 721(a) "shall not apply to gain realized on a transfer of property to a partnership which would be treated as an investment company (within the meaning of section 351(e)) if the partnership were incorporated." In other words, if the Master Fund, hypothetically recast as a corporation, would constitute an "investment company" under IRC § 351(e), then the § 721(a) nonrecognition rule would not apply, and the contributing Legacy Offshore Vehicles would be required to recognize gain on their respective contributions.

Statutory and Regulatory Framework. The investment company concept originates in IRC § 351(e), which provides that § 351 (the corporate nonrecognition analog to § 721) does not apply to a transfer to an "investment company." The term "investment company" is defined in the regulations. Under Treas. Reg. § 1.351-1(c)(1)(ii), a transfer results in the formation of an "investment company" if (i) the transfer results in "diversification" of the transferors' interests and (ii) the transferee holds primarily "stocks, securities, money, notes, options, forward or futures contracts, notional principal contracts, and derivatives" — collectively, investment-type assets. The diversification requirement is examined under the principles of Treas. Reg. § 1.351-1(c)(5) and (6), and the asset composition is evaluated by reference to the character of the transferee's holdings after the transfers.

Analysis. The investment company exception does not apply to the Reorganization for the following reasons:

First, the Consolidated Master Fund LP's portfolio will consist entirely of operating company interests in digital infrastructure businesses and enterprise SaaS platforms. All 23 portfolio companies are actively managed operating businesses, not passive investment vehicles holding publicly traded securities or similar investment assets. The representative portfolio companies illustrate this point:

• NovaBright Data Systems Inc. operates a portfolio of data center facilities, employing technical staff and generating revenue from colocation services, managed hosting, and cloud connectivity.

• Crestline Cloud Solutions LLC operates an enterprise SaaS platform, developing and licensing proprietary software to enterprise customers.

• Veridian Edge Computing Corp. develops and operates edge computing infrastructure, deploying distributed computing nodes at the network edge for latency-sensitive applications.

• Thorngate Fiber Networks LP owns and operates a fiber-optic network spanning multiple metropolitan areas, generating revenue from dark fiber leases, lit services, and wholesale bandwidth.

• Helix SaaS Holdings Ltd. is a holding company for a portfolio of enterprise SaaS businesses, each of which operates an active software business.

None of the 23 portfolio companies is a passive investment vehicle, registered investment company, or entity whose assets consist primarily of publicly traded securities, money market instruments, or similar investment assets. The Master Fund's portfolio is fundamentally an operating business portfolio, not an investment portfolio.

Second, even if the diversification prong were satisfied (which is doubtful, given that the Legacy Offshore Vehicles are contributing substantially the same types of operating company interests in the same industry vertical), the asset composition prong is not satisfied. The Master Fund will not hold "stocks, securities, money, notes, options, forward or futures contracts, notional principal contracts, and derivatives" as its primary assets. It will hold equity interests in operating companies, which are distinguishable from the investment-type assets listed in the regulation.

Conclusion. The Master Fund does not constitute an "investment company" within the meaning of IRC § 351(e) and Treas. Reg. § 1.351-1(c)(1)(ii). Accordingly, the exception in § 721(b) should not apply, and the nonrecognition treatment under § 721(a) should be available for each of the contribution transactions in Steps 2 through 4.

Risk Level: Low. The application of § 721(b) to a fund holding operating company interests in digital infrastructure businesses is clearly inapposite. However, because of the scale of built-in gain ($1.72 billion) and the potential for IRS scrutiny of any transaction of this magnitude, we recommend seeking Ruling 2 to confirm that § 721(b) does not apply. The PLR request will include detailed representations regarding the nature and composition of the Master Fund's portfolio, supported by the Redstone Advisory Group appraisals.

C. Section 723 — Basis of Contributed Property

As noted above, under IRC § 723, the Master Fund will take a carryover basis in each asset contributed by the Legacy Offshore Vehicles, equal to the contributing partnership's adjusted tax basis at the time of the contribution. The total carryover basis for all contributed assets is approximately $6.03 billion. The carryover basis is computed on an asset-by-asset basis and will be documented in PLR Exhibit E (Tax Basis Reconciliation), based on data provided by Caldwell Pierce & Co. LLP. No separate ruling is requested with respect to § 723, as the carryover basis rule follows automatically from the application of § 721(a).

D. Section 1223(2) — Holding Period Tacking

Under IRC § 1223(2), the Master Fund tacks the contributing partnership's holding period for each contributed asset. This rule ensures that the Master Fund's holding period in the contributed assets includes the period during which the Legacy Offshore Vehicles held such assets, which is relevant to the characterization of gain or loss as long-term or short-term upon future dispositions. No separate ruling is requested with respect to § 1223(2).

VII. TAX ANALYSIS — IRC § 367 (INAPPLICABILITY TO PARTNERSHIP-TO-PARTNERSHIP TRANSFERS)

A. Statutory Framework

Section 367 of the Code imposes certain requirements and limitations on tax-free transactions involving foreign corporations. Section 367 was enacted as a "tollcharge" provision to ensure that taxpayers cannot use outbound or inbound corporate reorganizations, formations, or liquidations to shift appreciated assets across the U.S. tax border without recognizing gain.

Section 367(a). IRC § 367(a)(1) provides that, for purposes of certain nonrecognition provisions of the Code, if a United States person transfers property to a foreign corporation in connection with an exchange described in IRC §§ 332, 351, 354, 356, or 361, the foreign corporation "shall not be considered to be a corporation." The effect of this provision is to disqualify the exchange from nonrecognition treatment unless an exception applies (e.g., the "active trade or business" exception under § 367(a)(3) and Treas. Reg. § 1.367(a)-3).

Section 367(b). IRC § 367(b) applies to exchanges described in IRC §§ 332, 351, 354, 355, 356, or 361 "in which the status of a foreign corporation as a corporation is relevant for purposes of" any of those provisions, and authorizes the Secretary to prescribe regulations providing for income inclusion or other adjustments in such transactions. The regulations under § 367(b) address range inbound transactions, including the repatriation of earnings through cross-border reorganizations and liquidations.

Critically, both § 367(a) and § 367(b) by their terms apply only to transfers involving corporations. Section 367(a) addresses transfers of property "to a foreign corporation" in exchanges described in the enumerated corporate nonrecognition provisions (§§ 332, 351, 354, 356, 361). Section 367(b) addresses exchanges in which the "status of a foreign corporation as a corporation" is relevant. Neither provision references transfers to or from partnerships, and neither references § 721 (the partnership contribution provision) among its list of operative sections.

B. Application to the Reorganization

The contributions in Steps 2 through 4 of the Reorganization involve transfers by foreign partnerships (Fund IV-A Cayman, a Cayman Islands exempted LP; Fund IV-B Lux, a Luxembourg SCSp; Fund V-A Cayman, a Cayman Islands exempted LP; and Fund V-B Lux, a Luxembourg SCSp) to a domestic partnership (the Consolidated Master Fund LP, a Delaware LP classified as a partnership under the check-the-box regulations). No corporation — either domestic or foreign — is involved as a transferor or transferee in any of the contribution transactions. The contributions are governed by IRC § 721(a) (partnership contributions), not by any of the corporate nonrecognition provisions referenced in § 367 (§§ 332, 351, 354, 356, 361).

Accordingly, IRC § 367(a) does not apply to any step of the Reorganization because:

(i) The transferee (the Consolidated Master Fund LP) is not a "foreign corporation" — it is a domestic partnership;

(ii) The transferors (the Legacy Offshore Vehicles) are not "corporations" — they are partnerships; and

(iii) The contributions are described in IRC § 721(a), which is not among the operative exchange sections enumerated in § 367(a)(1) (§§

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
TO: Leonard Cross, Responsible Partner, Tax Sylvia Hartwell, Billing Partner, Tax
FROM: Robert Jansen, Lead Associate, Tax Garrett Simmons, Working Associate, Tax
DATE: June 16, 2025
RE: Master Tax Analysis — Solara Digital Infrastructure LP Cross-Border Fund-Platform Reorganization
ENGAGEMENT: 20250527-SDILP-PLR
CLIENT: Solara Digital Infrastructure LP
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I. EXECUTIVE SUMMARY
This memorandum sets forth a comprehensive analysis of the United States federal income tax consequences of the proposed multi-step cross-border reorganization of the Solara Digital Infrastructure LP ("Solara" or "SDILP") fund platform (the "Reorganization"). Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") was engaged by Solara on May 12, 2025, and the matter was formally opened on May 27, 2025, under Engagement Number 20250527-SDILP-PLR. The primary purpose of the engagement is to prepare and submit a private letter ruling ("PLR") request to the Internal Revenue Service ("IRS"), Office of the Associate Chief Counsel (International) ("CC:INTL"), which has primary jurisdiction over the cross-border aspects of the proposed transaction, with secondary jurisdiction vested in the Office of the Associate Chief Counsel (Passthroughs and Special Industries) ("CC:PSI") with respect to the partnership-specific provisions implicated by the Reorganization.
The Reorganization involves the domestication and merger of four offshore fund vehicles — two Cayman Islands exempted limited partnerships and two Luxembourg special limited partnerships (sociétés en commandite spéciale, or "SCSps") — into a newly established Delaware-domiciled master fund structure, to be known as Solara Consolidated Master Fund LP (the "Consolidated Master Fund" or the "Master Fund"). The offshore vehicles to be reorganized are collectively referred to herein as the "Legacy Offshore Vehicles." The Reorganization is designed to consolidate the existing parallel fund structure into a streamlined master-feeder architecture, while preserving the tax-efficient positioning of Solara's diverse investor base, which includes United States taxable investors, United States tax-exempt institutional investors (including public pension funds and university endowments), and non-U.S. investors (including a sovereign wealth fund and a Singapore-domiciled insurance company).
The transaction implicates multiple provisions of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC"), including: IRC § 721(a) (nonrecognition of gain on contributions to partnerships), IRC § 721(b) (investment company exception), IRC § 731(a) (nonrecognition of gain on partnership distributions), IRC § 731(c) (marketable securities treated as money), IRC § 752 (treatment of certain partnership liabilities), IRC § 704(c) (allocations with respect to contributed property), IRC § 367 (transfers to and from foreign corporations — inapplicability analysis), IRC § 1446 (withholding on effectively connected taxable income allocable to foreign partners), IRC § 897 (disposition of investment in United States real property — FIRPTA), and the entity classification regulations under Treasury Regulations § 301.7701-3 (check-the-box rules).
The aggregate financial dimensions of the Reorganization are substantial. The total fair market value ("FMV") of assets to be transferred to the Consolidated Master Fund is approximately $7.75 billion. The total aggregate adjusted tax basis of such assets is approximately $6.03 billion, yielding a total aggregate built-in gain of approximately $1.72 billion. Aggregate liabilities to be assumed by the Consolidated Master Fund total approximately $1.34 billion. The Reorganization encompasses 23 portfolio companies across all fund vehicles — 11 held by the Fund IV complex and 12 held by the Fund V complex. The portfolio spans digital infrastructure assets including data center operations, fiber-optic network infrastructure, edge computing platforms, and enterprise SaaS businesses.
Based on the analysis set forth in this memorandum and in the companion memoranda referenced in Section XX below, it is our conclusion that the Reorganization should qualify for tax-free treatment under the relevant provisions of the Code, subject to certain risk areas identified herein, most notably in connection with the marketable securities characterization under IRC § 731(c), the complexity of the liability shifting analysis under IRC § 752, and the FIRPTA implications for non-U.S. investors with respect to portfolio company interests that may constitute United States real property interests.
We recommend that Solara request all eight specific rulings described in Section XVII below from the IRS to confirm the intended tax treatment of the Reorganization. Given the magnitude of the transaction, the cross-border dimension, and the diversity of the investor base, obtaining a PLR will provide critical certainty for all stakeholders and their respective advisors. The target date for submission of the PLR request is August 15, 2025, to the attention of CC:INTL, 1111 Constitution Avenue NW, Washington, DC 20224. We have requested a pre-submission conference with IRS CC:INTL Branch 1 for July 22, 2025, to present the core issues and gauge the IRS's receptivity to the requested rulings before the formal submission.
This memorandum is intended to serve as the master analytical framework for the Reorganization. It summarizes analyses that are developed in substantially greater detail in fourteen separate companion memoranda, each addressing a specific Code section or topic individually. The companion memoranda are listed in Section XX of this memorandum. Each companion memorandum is intended to be read in conjunction with this master memorandum, and cross-references between this memorandum and the companion memoranda are provided throughout.
II. BACKGROUND AND PARTIES
A. Solara Digital Infrastructure LP — Overview
Solara Digital Infrastructure LP ("Solara," "SDILP," or the "Sponsor") is a Delaware limited partnership formed on March 17, 2014, under the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101 et seq. Solara maintains its principal office and headquarters at 1200 Market Street, Suite 3400, Wilmington, Delaware 19801. Its Employer Identification Number is 82-4917366.
As of March 31, 2025, Solara manages assets under management ("AUM") of approximately $14.7 billion across its fund platform. The firm's core investment strategy is the sponsorship of private equity funds targeting digital infrastructure, with a particular focus on four verticals: (i) data center development and operations, (ii) fiber-optic network infrastructure, (iii) edge computing and distributed infrastructure, and (iv) enterprise software-as-a-service ("SaaS") platforms. Solara has established itself as a leading specialist manager in the digital infrastructure private equity space, with a track record spanning two completed fund cycles and two active funds.
The Managing Partner and Founder of Solara is Viktor Raines, age 52, who founded the firm after serving as a managing director at Havensgate Capital Partners, a diversified private equity sponsor. The remainder of the senior management team includes:
• Chief Operating Officer: Meredith Tsao
• Chief Financial Officer: Douglas Wexford
• General Counsel: Priya Narasimhan
• Head of Tax: Stefan Dalmqvist
Mr. Dalmqvist serves as the firm's primary internal tax contact for purposes of this engagement and has been designated by Ms. Narasimhan as the authorized representative for day-to-day communications with Calderwood & Harkness regarding the PLR request and the Reorganization.
B. General Partner
Solara Digital Infrastructure GP LLC ("Solara GP") is a Delaware limited liability company, EIN 82-4917365, which serves as the general partner of SDILP and the existing Delaware-domiciled fund vehicles (Fund IV LP and Fund V LP). Solara GP is managed by Viktor Raines in his capacity as the sole managing member. Solara GP's registered agent in the State of Delaware is Capitol Registered Agents Inc., located at 850 New Burton Road, Suite 201, Dover, Delaware 19904. The partnership agreement of each Delaware fund vehicle designates Solara GP as the general partner with customary authority to manage the affairs of the partnership, including the authority to effect the transactions described in this memorandum, subject to the consent requirements discussed in Section XVIII.F below.
C. Existing Fund Vehicles (Legacy Offshore Vehicles Subject to Reorganization)
Solara's fund platform currently consists of six parallel fund vehicles, organized across three jurisdictions (Delaware, the Cayman Islands, and Luxembourg), to accommodate the distinct tax, regulatory, and reporting requirements of Solara's three principal investor pools: (i) U.S. taxable investors (accommodated through the Delaware main funds), (ii) U.S. tax-exempt investors (accommodated through the Cayman Islands parallel vehicles, which employ UBTI blocker structures), and (iii) non-U.S. investors (accommodated through either the Cayman Islands or Luxembourg parallel vehicles, depending on treaty and regulatory considerations applicable to the specific investor). The existing fund vehicles are organized into two fund complexes — Fund IV and Fund V — each of which includes one Delaware main fund and two offshore parallel vehicles. The four offshore vehicles are the subjects of the Reorganization.
1. Fund IV Complex. The Fund IV complex consists of three vehicles, established as a single vintage with a 2021 closing. As of the date of this memorandum, the Fund IV complex is approximately 72% deployed.
Solara Digital Partners Fund IV LP ("Fund IV" or "Fund IV LP"): Fund IV is a Delaware limited partnership, EIN 85-2103748, with a total fund size of $4.2 billion. Solara GP serves as the general partner. Fund IV is the primary vehicle for U.S. taxable investors in the Fund IV vintage. Fund IV LP is not a subject of the Reorganization — it will continue to exist as a Delaware limited partnership and will co-invest alongside the Consolidated Master Fund following the Reorganization. However, Fund IV LP's co-investment relationships with certain portfolio companies (e.g., NovaBright Data Systems Inc. and Veridian Edge Computing Corp.) and its position as the primary borrower under the Fund IV subscription credit facility are directly relevant to the analysis herein.
Solara Digital Partners Fund IV-A (Cayman) LP ("Fund IV-A Cayman" or "Fund IV-A"): Fund IV-A is a Cayman Islands exempted limited partnership, holding a U.S. EIN of 98-6241503 and bearing Cayman Islands Monetary Authority ("CIMA") registration number MF-72491. The total fund size of Fund IV-A is $1.85 billion. Its registered office is maintained at Harborstone Corporate Services Ltd., P.O. Box 2714, 94 Solaris Avenue, George Town, Grand Cayman, KY1-1111, Cayman Islands. The general partner of Fund IV-A is Solara Offshore GP Ltd., a Cayman Islands exempted company. Fund IV-A serves as the parallel fund for non-U.S. investors and certain U.S. tax-exempt investors in the Fund IV vintage. Fund IV-A Cayman is one of the four Legacy Offshore Vehicles that is a subject of the Reorganization.
Solara Digital Partners Fund IV-B (Luxembourg) SCSp ("Fund IV-B Lux" or "Fund IV-B"): Fund IV-B is a Luxembourg special limited partnership (société en commandite spéciale), organized under the Luxembourg law of July 12, 2013, on sociétés en commandite spéciale. Fund IV-B holds a U.S. EIN of 98-6241571 and is registered with the Luxembourg Registre de Commerce et des Sociétés ("RCS") under number B 248193. The total fund size of Fund IV-B is €1.15 billion, which at the uniform EUR/USD exchange rate of 1.08 applied throughout this memorandum, is equivalent to approximately $1.24 billion. The registered office of Fund IV-B is located at 14, rue Jean-Pierre Brasseur, L-1258 Luxembourg. The general partner of Fund IV-B is Solara Luxembourg Management S.à r.l., a Luxembourg société à responsabilité limitée, RCS number B 248194. Fund IV-B was established to accommodate non-U.S. investors — particularly European institutional investors — for whom the Luxembourg SCSp structure provided advantages related to European tax treaty networks and regulatory familiarity. Fund IV-B Lux is one of the four Legacy Offshore Vehicles that is a subject of the Reorganization.
2. Fund V Complex. The Fund V complex likewise consists of three vehicles, established as a single vintage with a 2023 closing. As of the date of this memorandum, the Fund V complex is approximately 38% deployed, reflecting its more recent vintage.
Solara Digital Partners Fund V LP ("Fund V" or "Fund V LP"): Fund V is a Delaware limited partnership, EIN 88-3467219, with a total fund size of $5.6 billion. Solara GP serves as the general partner. Fund V is the primary vehicle for U.S. taxable investors in the Fund V vintage. Like Fund IV LP, Fund V LP is not a subject of the Reorganization; it will continue to exist and will co-invest alongside the Consolidated Master Fund.
Solara Digital Partners Fund V-A (Cayman) LP ("Fund V-A Cayman" or "Fund V-A"): Fund V-A is a Cayman Islands exempted limited partnership, U.S. EIN 98-7891234, CIMA registration number MF-89103, with a total fund size of $2.45 billion. Its registered office is maintained at Harborstone Corporate Services Ltd., George Town, Grand Cayman, Cayman Islands. Fund V-A Cayman is a Legacy Offshore Vehicle subject to the Reorganization.
Solara Digital Partners Fund V-B (Luxembourg) SCSp ("Fund V-B Lux" or "Fund V-B"): Fund V-B is a Luxembourg SCSp, U.S. EIN 98-7891267, RCS number B 271056, with a total fund size of €1.38 billion (approximately $1.49 billion at 1.08 EUR/USD). Its registered office is located at 14, rue Jean-Pierre Brasseur, L-1258 Luxembourg. Fund V-B Lux is a Legacy Offshore Vehicle subject to the Reorganization.
D. Newly Formed Entities (Post-Reorganization)
The Reorganization contemplates the formation of four new entities, which will collectively constitute the post-Reorganization master-feeder structure:
Solara Consolidated Master Fund LP (the "Master Fund"): The Master Fund will be a Delaware limited partnership, to be formed under the Delaware Revised Uniform Limited Partnership Act. The Master Fund will serve as the central consolidated vehicle, receiving the portfolio company assets from each of the four Legacy Offshore Vehicles through the contribution transactions described in Steps 2 through 4 of the Reorganization. Following completion of the Reorganization, the Master Fund will hold all 23 portfolio companies formerly held by the Legacy Offshore Vehicles. It will be classified as a partnership for U.S. federal income tax purposes.
Solara Consolidated Master Fund GP LLC (the "Master Fund GP"): The Master Fund GP will be a Delaware limited liability company, to be formed contemporaneously with the Master Fund. It will serve as the general partner of the Master Fund. Viktor Raines will serve as the managing member of the Master Fund GP.
Solara International Feeder (Cayman) LP (the "International Feeder" or "Int'l Feeder"): The International Feeder will be a Cayman Islands exempted limited partnership, to be formed under the Cayman Islands Exempted Limited Partnership Act. The International Feeder will serve as the feeder vehicle for non-U.S. investors investing into the Master Fund. Following the Reorganization, non-U.S. limited partners currently invested through Fund IV-A Cayman and Fund V-A Cayman (including the Nordhaven Sovereign Wealth Fund) and through Fund IV-B Lux and Fund V-B Lux (including Kestrel Pacific Insurance Group) will hold their interests in the Master Fund indirectly through the International Feeder.
Solara Tax-Exempt Feeder (Cayman) LP (the "Tax-Exempt Feeder" or "TE Feeder"): The Tax-Exempt Feeder will be a Cayman Islands exempted limited partnership, to be formed contemporaneously with the International Feeder. The Tax-Exempt Feeder will serve as the feeder vehicle for U.S. tax-exempt investors (including public pension funds and university endowments) investing into the Master Fund, with the objective of mitigating unrelated business taxable income ("UBTI") concerns under IRC §§ 511–514 that would otherwise arise from direct investment in a leveraged partnership.
All four newly formed entities will file IRS Form 8832 elections under Treasury Regulations § 301.7701-3 to be classified as partnerships for U.S. federal income tax purposes. The timing and coordination of these elections are discussed in Section XIII below.
E. Representative Limited Partners
The following table sets forth the principal limited partners of the Solara fund platform that are representative of the investor categories affected by the Reorganization. This table is not exhaustive but identifies the key investors whose tax positions have been considered in the preparation of this analysis and the PLR request.
The Pinnacle State Employees' Retirement System and Grandview University Endowment are representative of U.S. tax-exempt investors whose primary concern in the Reorganization is the avoidance of UBTI. The Nordhaven Sovereign Wealth Fund is representative of non-U.S. sovereign investors whose primary concerns include U.S. withholding tax obligations under IRC § 1446, FIRPTA exposure under IRC § 897, and applicable treaty benefits. Kestrel Pacific Insurance Group is representative of non-U.S. corporate investors with similar withholding and FIRPTA concerns, as well as considerations under the Singapore-U.S. income tax treaty. Argyle Family Office Holdings LLC is representative of U.S. taxable investors whose primary concern is the preservation of basis and the avoidance of current gain recognition.
F. Advisors and Third Parties
The following firms and individuals are serving as advisors to the parties or are otherwise involved in the Reorganization in material capacities:
Calderwood & Harkness LLP — U.S. tax counsel to Solara Digital Infrastructure LP. The engagement team consists of Leonard Cross (responsible partner), Sylvia Hartwell (billing partner), Robert Jansen (lead associate), and Garrett Simmons (working associate). Calderwood & Harkness has been engaged to prepare the PLR request and to provide comprehensive U.S. federal income tax advice in connection with the Reorganization.
Whitfield, Carruthers & Doyle LLP (Diana Carruthers, lead partner) — Outside counsel to the Limited Partner Advisory Committee ("LPAC"). Whitfield, Carruthers & Doyle has been engaged by the LPAC to review the terms of the Reorganization on behalf of the limited partners and to provide an independent assessment of the tax analysis. Ms. Carruthers has been provided with access to certain prior drafts of the PLR request and is expected to provide comments on PLR Draft v3.0 by July 15, 2025.
Bramhall & Quelwick LLP (Jason Tremaine, lead partner) — Independent U.S. tax counsel retained separately by the Nordhaven Sovereign Wealth Fund for the purpose of analyzing U.S. withholding tax obligations, treaty benefits, and FIRPTA implications specific to the Nordhaven SWF's position in the Reorganization. Coordination between Calderwood & Harkness and Bramhall & Quelwick is ongoing, and certain representations in the PLR request may need to be reviewed by Mr. Tremaine prior to submission.
Meridian Offshore Legal (Fiona McAllister, lead counsel) — Cayman Islands counsel, engaged to advise on the formation and CIMA registration of the two new Cayman feeder entities (International Feeder and Tax-Exempt Feeder), the dissolution of Fund IV-A Cayman and Fund V-A Cayman, and the deregistration of CIMA registrations MF-72491 and MF-89103. Meridian Offshore Legal also serves as local counsel for purposes of confirming the Cayman Islands tax and regulatory treatment described in Section XV below.
Veldhuis & Gérard S.à r.l. (Marc Gérard, lead counsel) — Luxembourg counsel, engaged to advise on the dissolution and wind-down of Fund IV-B Lux (RCS B 248193) and Fund V-B Lux (RCS B 271056), including Luxembourg tax treatment of the asset contributions and CSSF notification requirements. Veldhuis & Gérard's analysis of Luxembourg tax consequences is summarized in Section XIV below.
Caldwell Pierce & Co. LLP (Helen Okamoto, engagement partner) — Independent accounting firm providing annual audit and tax compliance services for all Solara fund vehicles. Caldwell Pierce is furnishing the adjusted tax basis records, historical capital account data, and supporting financial documentation required for the PLR exhibits.
Redstone Advisory Group LLC (Marco DeLuca, managing director) — Transfer pricing and valuation advisory firm, retained to prepare independent FMV appraisals of each portfolio company interest being contributed to the Master Fund. The Redstone appraisals will be submitted as an exhibit to the PLR request and will serve as the primary support for the FMV figures used throughout this memorandum.
Clarendon Fund Services Ltd. (Rachel Okonkwo, director) — Fund administrator for the offshore vehicles, responsible for NAV calculations, investor reporting, and coordination of the LP migration process in Step 5 of the Reorganization.
Ashford National Bank, N.A. (Thomas Greenleaf, managing director, Fund Finance) — Subscription credit facility lender for both Fund IV ($1.1 billion facility) and Fund V ($1.5 billion facility, co-lent with Sentinel Capital Markets LLC). The treatment of the subscription credit facilities under IRC § 752 is discussed in Section IX.C below.
Sentinel Capital Markets LLC (Laura Pak, senior vice president) — Co-lender and administrative agent under the Fund V subscription credit facility. Sentinel's consent to the Reorganization may be required under the terms of the credit agreement, and coordination with Sentinel regarding the impact of the Reorganization on the borrowing base and collateral structure is ongoing.
Hawkstone Specialty Insurance Co. (Neil Braddock, underwriting director) — Provider of directors' and officers' liability insurance and errors and omissions coverage to Solara and its affiliated entities, with an aggregate limit of $50 million. The Reorganization may require notification to Hawkstone under the policy's change-in-control or material transaction provisions.
III. BUSINESS RATIONALE FOR THE REORGANIZATION
The Reorganization is driven by multiple independent and collectively reinforcing business purposes, which are summarized below. As discussed in Section XVI.B of this memorandum, the existence of substantial non-tax business purposes is relevant to the anti-abuse and substance-over-form analyses that the IRS may apply in evaluating the PLR request. While the Reorganization will also yield certain tax efficiencies — principally the simplification of the entity structure and associated tax compliance — each of the business rationales described below independently justifies the transaction on non-tax grounds.
Current Structure. Solara currently maintains six parallel fund vehicles across three jurisdictions — Delaware, the Cayman Islands, and Luxembourg — in order to accommodate the distinct needs of its three principal investor pools: (i) U.S. taxable investors, who invest through the Delaware main funds (Fund IV LP and Fund V LP); (ii) U.S. tax-exempt investors, who invest through the Cayman Islands parallel vehicles (Fund IV-A Cayman and Fund V-A Cayman), which employ UBTI blocker structures to address concerns under IRC §§ 511–514; and (iii) non-U.S. investors, who invest through either the Cayman Islands or Luxembourg parallel vehicles (Fund IV-B Lux and Fund V-B Lux), depending on treaty access, regulatory considerations, and investor preference. This parallel structure was originally adopted at the time of Fund IV's formation in 2021 and replicated for Fund V in 2023, reflecting then-prevailing market practice and the specific requirements of the investor base at that time.
Operational Cost Reduction. The maintenance of the parallel offshore structure imposes significant and ongoing operational costs. Solara currently pays approximately $3.8 million annually in duplicative administration, audit, and regulatory fees associated with the Cayman and Luxembourg vehicles. These costs include CIMA annual fees and regulatory filings, Luxembourg RCS annual filings and CSSF notifications, offshore registered office and corporate services fees (Harborstone Corporate Services Ltd. in the Cayman Islands and the Luxembourg registered office), duplicative annual audit fees charged by Caldwell Pierce & Co. LLP for each offshore entity, duplicative fund administration fees charged by Clarendon Fund Services Ltd., and legal compliance costs in multiple jurisdictions. Consolidation into a single master fund with two feeder vehicles will substantially reduce these costs by eliminating the need for separate financial statements, separate audit engagements, and separate regulatory filings for each Legacy Offshore Vehicle.
OECD Pillar Two GloBE Rules. Effective for Solara's Luxembourg entities beginning in fiscal year 2025, the OECD's Pillar Two Global Anti-Base Erosion ("GloBE") rules, as implemented through the EU Minimum Tax Directive (Council Directive (EU) 2022/2523), fundamentally alter the tax landscape for the Luxembourg SCSp structures. The GloBE rules impose a global minimum effective tax rate of 15% on large multinational enterprises, including constituent entities of investment fund structures that meet the relevant revenue thresholds. While the Luxembourg SCSps are themselves tax-transparent for Luxembourg purposes, the application of the GloBE rules to certain Luxembourg-resident constituent entities (including the GP entity, Solara Luxembourg Management S.à r.l.) and the potential application of the Income Inclusion Rule and Undertaxed Profits Rule to Solara's broader structure diminish the tax benefits historically provided by the Luxembourg SCSp structures. As a result, the operational rationale for maintaining separate Luxembourg vehicles has been materially weakened, and the cost-benefit analysis now favors consolidation.
FATCA and CRS Simplification. The current multi-jurisdictional structure imposes substantial compliance burdens under the Foreign Account Tax Compliance Act ("FATCA," IRC §§ 1471–1474) and the Common Reporting Standard ("CRS") promulgated by the OECD. Each offshore entity is independently subject to FATCA registration and reporting obligations, and each Cayman and Luxembourg entity is subject to CRS reporting obligations under its respective local implementing legislation. Consolidation into a master-feeder structure will centralize FATCA and CRS compliance and reduce the number of separately reporting entities, thereby lowering compliance costs and reducing the risk of reporting errors.
LP-Requested Governance Simplification. The limited partners themselves have expressed a desire for simplified governance and reporting across the Solara platform. At the LPAC meeting held on April 22, 2025, at which representatives of each of the five representative investors listed in Section II.E were present or represented by proxy, the LPAC provided preliminary consent to the Reorganization, with affirmative votes representing approximately 78% of total commitments in interest. The limited partners have cited, among other things, the burden of receiving and reviewing separate financial statements, K-1s (or equivalent reporting), and capital account statements from multiple parallel fund vehicles investing in substantially the same portfolio companies. The consolidated structure will allow for unified investor reporting through a single master fund, with feeder-level reporting limited to the allocation of income and expenses between the feeders and the master fund.
Note on Business Purpose. Each of the rationales described above independently constitutes a substantial non-tax business purpose for the Reorganization. Collectively, these rationales provide a compelling basis for the conclusion that the Reorganization is not primarily motivated by tax avoidance and that the tax-free treatment sought under IRC §§ 721 and 731 is consistent with the congressional intent underlying those provisions. This conclusion is relevant to the anti-abuse and step-transaction analysis set forth in Section XVI below, and the PLR request will include a detailed recitation of these business purposes as part of the representations supporting the requested rulings.
IV. DESCRIPTION OF THE PROPOSED REORGANIZATION — FIVE-STEP TRANSACTION
The Reorganization consists of five sequentially executed steps, each of which is described in detail below. The steps are designed to be completed during the fourth quarter of 2025, with a target effective date for completion of December 1, 2025. The sequencing of the steps has been designed to minimize operational disruption, accommodate the timing requirements of the Form 8832 check-the-box elections, and allow for orderly coordination with foreign counsel in the Cayman Islands and Luxembourg.
A. Step 1 — Formation of New Entities (Target: September 15, 2025)
The first step in the Reorganization is the formation of the four new entities that will constitute the post-Reorganization master-feeder structure. The target date for completion of all entity formations is September 15, 2025, which provides a lead time of approximately two weeks before the first contribution transaction in Step 2.
The following entities will be formed:
1. Solara Consolidated Master Fund GP LLC — A Delaware limited liability company, to be formed through Capitol Registered Agents Inc. in Dover, Delaware. The Master Fund GP will serve as the general partner of the Master Fund. Viktor Raines will serve as the sole managing member.
2. Solara Consolidated Master Fund LP — A Delaware limited partnership, to be formed through Capitol Registered Agents Inc. in Dover, Delaware. The Master Fund will be the central consolidated vehicle of the post-Reorganization structure, receiving all portfolio company assets from the Legacy Offshore Vehicles.
3. Solara International Feeder (Cayman) LP — A Cayman Islands exempted limited partnership, to be formed by Meridian Offshore Legal (Fiona McAllister, lead counsel) with Harborstone Corporate Services Ltd. serving as registered office provider. The International Feeder will serve as the feeder vehicle for non-U.S. investors.
4. Solara Tax-Exempt Feeder (Cayman) LP — A Cayman Islands exempted limited partnership, to be formed contemporaneously with the International Feeder by Meridian Offshore Legal, with Harborstone Corporate Services Ltd. serving as registered office provider. The Tax-Exempt Feeder will serve as the feeder vehicle for U.S. tax-exempt investors.
Upon formation, each new entity will file IRS Form 8832 (Entity Classification Election) under Treasury Regulations § 301.7701-3 to elect classification as a partnership for U.S. federal income tax purposes. As discussed in greater detail in Section XIII below, the domestic entities (Master Fund GP LLC and Master Fund LP) default to partnership classification under Treas. Reg. § 301.7701-3(b)(1), and the Form 8832 elections will serve as confirmatory filings. The foreign entities (International Feeder and Tax-Exempt Feeder) are also expected to default to partnership classification under Treas. Reg. § 301.7701-3(b)(2)(i)(A) because at least one member (the general partner) has unlimited liability, but the Form 8832 elections will be filed for certainty. The effective dates of the elections must be coordinated with the subsequent contribution and distribution steps to ensure that each entity is properly classified as a partnership before it participates in any transaction that is intended to be governed by Subchapter K. The 75-day retroactivity rule under Treas. Reg. § 301.7701-3(c)(1)(iii) — which permits an election to be effective up to 75 days prior to the date the election is filed — provides an additional timing cushion in the event of any delays in entity formation.
B. Step 2 — Contribution of Fund IV-A Cayman Assets (Target: October 1, 2025)
In the second step, Solara Digital Partners Fund IV-A (Cayman) LP ("Fund IV-A Cayman") will contribute all of its portfolio company assets to the Solara Consolidated Master Fund LP in exchange for a limited partnership interest in the Master Fund. Fund IV-A Cayman will contribute its entire portfolio in a single transaction, and following the contribution, Fund IV-A Cayman will hold no portfolio assets other than its newly received limited partnership interest in the Master Fund and any residual cash and working capital.
The aggregate financial dimensions of the Step 2 contribution are as follows:
• Aggregate FMV of contributed assets: $2.31 billion
• Aggregate adjusted tax basis of contributed assets: $1.62 billion
• Aggregate built-in gain: $690 million
The key portfolio company interests contributed in Step 2 include the following:
NovaBright Data Systems Inc. — Fund IV-A Cayman holds a 60% equity interest in NovaBright Data Systems Inc. ("NovaBright"), a Delaware corporation that operates a portfolio of data center facilities. The FMV of Fund IV-A's 60% interest is $890 million, the adjusted tax basis is $520 million, and the built-in gain is $370 million. The remaining 40% interest in NovaBright is held by Fund IV LP (the Delaware main fund), which is not a subject of the Reorganization. Following the Reorganization, the Master Fund will hold the 60% interest formerly held by Fund IV-A Cayman, and Fund IV LP will continue to hold the remaining 40% interest directly. The co-ownership of NovaBright between the Master Fund and Fund IV LP is relevant to the § 704(c) and § 752 analyses.
Thorngate Fiber Networks LP — Fund IV-A Cayman holds a 100% interest in Thorngate Fiber Networks LP ("Thorngate"), a Delaware limited partnership that owns and operates fiber-optic network infrastructure. The FMV of Fund IV-A's interest is $670 million, the adjusted tax basis is $490 million, and the built-in gain is $180 million.
The intended U.S. federal income tax treatment of the Step 2 contribution is as follows: The contribution should be treated as a tax-free contribution of property to a partnership in exchange for a partnership interest under IRC § 721(a), with no gain or loss recognized by either Fund IV-A Cayman or the Master Fund. The Master Fund should take a carryover basis in each contributed asset equal to Fund IV-A Cayman's adjusted tax basis at the time of the contribution under IRC § 723. The Master Fund should tack Fund IV-A Cayman's holding period for each contributed asset under IRC § 1223(2).
C. Step 3 — Contribution of Fund IV-B Luxembourg Assets (Target: October 15, 2025)
In the third step, Solara Digital Partners Fund IV-B (Luxembourg) SCSp ("Fund IV-B Lux") will contribute all of its portfolio company assets to the Solara Consolidated Master Fund LP in exchange for a limited partnership interest in the Master Fund. The contribution will be structured identically to the Step 2 contribution, with the additional cross-border dimension arising from the fact that Fund IV-B Lux is a foreign partnership (a Luxembourg SCSp) contributing assets to a domestic partnership (the Master Fund, a Delaware LP).
The aggregate financial dimensions of the Step 3 contribution are as follows:
• Aggregate FMV of contributed assets: €1.07 billion / $1.16 billion at 1.08 EUR/USD
• Aggregate adjusted tax basis of contributed assets: €782 million / $844.6 million
• Aggregate built-in gain: €288 million / $311 million
The key portfolio company interest contributed in Step 3 is:
Crestline Cloud Solutions LLC — Fund IV-B Lux holds a 100% interest in Crestline Cloud Solutions LLC ("Crestline"), a Delaware limited liability company that is treated as a disregarded entity for U.S. federal income tax purposes under Treas. Reg. § 301.7701-3. Crestline operates an enterprise SaaS platform. The FMV of Fund IV-B's interest in Crestline is €340 million ($367 million), the adjusted tax basis is €195 million ($211 million), and the built-in gain is €145 million ($156 million). Because Crestline is a disregarded entity, Fund IV-B Lux is treated as directly owning the assets of Crestline for U.S. federal income tax purposes. Following the contribution to the Master Fund, Crestline's disregarded entity status will continue, with the Master Fund treated as the owner of Crestline's assets.
The intended U.S. federal income tax treatment of the Step 3 contribution is the same as for Step 2: tax-free contribution under IRC § 721(a), with carryover basis under § 723 and holding period tacking under § 1223(2).
The Step 3 contribution involves additional cross-border considerations that do not arise in Step 2:
IRC § 367 Inapplicability. The contribution involves a transfer by a foreign partnership (Fund IV-B Lux, a Luxembourg SCSp) to a domestic partnership (the Master Fund, a Delaware LP). As discussed in detail in Section VII below, IRC § 367 applies by its terms only to transfers involving corporations (both § 367(a) and § 367(b)), and the contributions in Steps 3 and 4 do not involve any corporation as a transferor or transferee. Accordingly, § 367 should not apply to the Step 3 contribution.
IRC § 1446 Withholding. The contribution is a nonrecognition transaction under § 721(a), and no effectively connected taxable income should be generated. Therefore, no withholding under § 1446 should be required in connection with the Step 3 contribution. This analysis is discussed in detail in Section XI below.
Luxembourg Tax Treatment. No Luxembourg capital gains tax is expected at the SCSp level on the contribution of Fund IV-B Lux's assets to the Master Fund. Under Article 3(2) of the Luxembourg law of July 12, 2013, the SCSp is a fiscally transparent entity for Luxembourg tax purposes, and income and gains are attributed to its partners rather than to the SCSp itself. This analysis has been confirmed by Veldhuis & Gérard S.à r.l. (Marc Gérard) and is discussed in detail in Section XIV below.
D. Step 4 — Contribution of Fund V Offshore Assets (Target: November 1, 2025)
In the fourth step, the two remaining Legacy Offshore Vehicles — Fund V-A Cayman and Fund V-B Lux — will each contribute all of their respective portfolio company assets to the Consolidated Master Fund LP in exchange for limited partnership interests in the Master Fund. The two contributions will be executed on the same date (target: November 1, 2025) in two separate but simultaneous transactions.
Fund V-A (Cayman) LP Contribution:
• Aggregate FMV of contributed assets: $2.89 billion
• Aggregate adjusted tax basis of contributed assets: $2.34 billion
• Aggregate built-in gain: $550 million
The key portfolio company interests contributed by Fund V-A Cayman include:
Veridian Edge Computing Corp. — Fund V-A Cayman holds a 55% equity interest in Veridian Edge Computing Corp. ("Veridian"), a Delaware corporation operating edge computing infrastructure. The FMV of Fund V-A's 55% interest is $1.12 billion, the adjusted tax basis is $780 million, and the built-in gain is $340 million. The remaining 45% interest in Veridian is held by Fund V LP, which is not a subject of the Reorganization. The co-ownership structure parallels that of NovaBright, and the same analytical considerations apply.
Helix SaaS Holdings Ltd. — Fund V-A Cayman holds a 100% interest in Helix SaaS Holdings Ltd. ("Helix"), a Cayman Islands exempted company that serves as a holding company for a portfolio of enterprise SaaS businesses. The FMV of Fund V-A's interest is $445 million, the adjusted tax basis is $310 million, and the built-in gain is $135 million.
Fund V-B (Luxembourg) SCSp Contribution:
• Aggregate FMV of contributed assets: €1.29 billion / $1.39 billion at 1.08 EUR/USD
• Aggregate adjusted tax basis of contributed assets: €1.14 billion / $1.23 billion
• Aggregate built-in gain: €150 million / $162 million
The intended U.S. federal income tax treatment of the Step 4 contributions is the same as for Steps 2 and 3: tax-free contribution under IRC § 721(a), with carryover basis under § 723 and holding period tacking under § 1223(2). The same IRC § 367 inapplicability analysis and IRC § 1446 withholding analysis apply to the Fund V-B Lux contribution as to the Fund IV-B Lux contribution in Step 3.
E. Step 5 — Dissolution of Legacy Offshore Vehicles and LP Migration (Target: December 1, 2025)
In the fifth and final step, each of the four Legacy Offshore Vehicles — Fund IV-A (Cayman) LP, Fund IV-B (Luxembourg) SCSp, Fund V-A (Cayman) LP, and Fund V-B (Luxembourg) SCSp — will dissolve and distribute their respective limited partnership interests in the Consolidated Master Fund LP to their existing limited partners in complete liquidation.
Following the contributions in Steps 2 through 4, each Legacy Offshore Vehicle's sole significant asset will be its limited partnership interest in the Master Fund (together with any residual cash and working capital). In the dissolution distributions, each Legacy Offshore Vehicle will distribute its Master Fund interest to its limited partners on a pro rata basis in accordance with each partner's capital account and sharing ratio.
Upon receipt of their respective Master Fund interests, the limited partners of the Legacy Offshore Vehicles will be reallocated to the appropriate feeder vehicle:
• Non-U.S. limited partners (including the Nordhaven Sovereign Wealth Fund and Kestrel Pacific Insurance Group) will contribute their received Master Fund interests to the Solara International Feeder (Cayman) LP in exchange for limited partnership interests in the International Feeder. The International Feeder will in turn hold the aggregated Master Fund interests on behalf of its non-U.S. limited partners.
• U.S. tax-exempt limited partners (including the Pinnacle State Employees' Retirement System and the Grandview University Endowment) will contribute their received Master Fund interests to the Solara Tax-Exempt Feeder (Cayman) LP in exchange for limited partnership interests in the Tax-Exempt Feeder. The Tax-Exempt Feeder will hold the aggregated Master Fund interests on behalf of its U.S. tax-exempt limited partners.
The intended U.S. federal income tax treatment of the Step 5 distributions is as follows: The distributions should be treated as tax-free distributions under IRC § 731(a). Gain is recognized under § 731(a)(1) only to the extent that "money" distributed exceeds the adjusted basis of the partner's partnership interest. The distributed property consists solely of partnership interests (i.e., the Master Fund LP interests), which constitute "property" rather than "money" for purposes of § 731(a)(1), unless the marketable securities rule of IRC § 731(c) applies. As discussed in Section VIII.B below, the Master Fund LP interests do not constitute "marketable securities" under § 731(c)(2), and accordingly the distributions should not trigger gain recognition for any limited partner.
Under IRC § 732, each limited partner will take an exchanged basis in its received Master Fund interest equal to its adjusted basis in its Legacy Offshore Vehicle interest immediately prior to the distribution, adjusted for any deemed distributions under § 752(b) resulting from liability shifts.
The dissolution of the two Cayman vehicles will be coordinated with Meridian Offshore Legal (Fiona McAllister), including the deregistration of CIMA registrations MF-72491 (Fund IV-A Cayman) and MF-89103 (Fund V-A Cayman). The dissolution of the two Luxembourg SCSps will be coordinated with Veldhuis & Gérard S.à r.l. (Marc Gérard), including the cancellation of RCS registrations B 248193 (Fund IV-B Lux) and B 271056 (Fund V-B Lux) and the required notification to the Commission de Surveillance du Secteur Financier ("CSSF").
Resulting Post-Reorganization Structure. Following completion of Step 5, the Solara fund platform will be organized as follows: The Master Fund (a Delaware LP) will hold all 23 portfolio companies formerly held by the Legacy Offshore Vehicles. Two Cayman feeder LPs — the International Feeder and the Tax-Exempt Feeder — will hold limited partnership interests in the Master Fund on behalf of their respective investor constituencies. U.S. taxable investors will remain directly invested in Fund IV LP and Fund V LP (the Delaware main funds), which were not subjects of the Reorganization and will continue to co-invest alongside the Master Fund in their respective portfolio companies.
V. AGGREGATE FINANCIALS OF THE REORGANIZATION
The following table summarizes the aggregate financial dimensions of the Reorganization:
The following table provides a breakdown of FMV, adjusted tax basis, and built-in gain by contributing entity:
All FMV figures are based on the independent appraisals prepared by Redstone Advisory Group LLC (Marco DeLuca, managing director) as of the anticipated valuation date and are subject to final adjustment as of the actual contribution dates. All adjusted tax basis figures are based on tax basis records maintained by Caldwell Pierce & Co. LLP (Helen Okamoto, engagement partner) and reconciled against partnership return data. Reconciliation of FMV and basis figures to the Redstone appraisals and Caldwell Pierce tax-basis records will be completed prior to submission of the PLR request and will be documented in PLR Exhibit D (Valuation Summary) and PLR Exhibit E (Tax Basis Reconciliation).
Representative Portfolio Company Detail
The following table provides detail on the five most significant portfolio companies by built-in gain, which together account for $1.181 billion (approximately 69%) of the total $1.72 billion aggregate built-in gain:
The remaining 18 portfolio companies have an aggregate built-in gain of approximately $539 million. A complete schedule of all 23 portfolio companies, including entity types, jurisdictions, ownership percentages, FMV, basis, built-in gain, and holding vehicle(s), will be included in PLR Exhibit C (Portfolio Company Schedule).
VI. TAX ANALYSIS — IRC § 721 (CONTRIBUTIONS TO PARTNERSHIPS)
A. Section 721(a) — General Nonrecognition Rule
Section 721(a) of the Internal Revenue Code provides that "[n]o gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership." This nonrecognition rule is the foundational provision governing the tax treatment of the contribution transactions in Steps 2, 3, and 4 of the Reorganization.
Application to the Reorganization. In each of Steps 2, 3, and 4, one or more of the Legacy Offshore Vehicles (Fund IV-A Cayman, Fund IV-B Lux, Fund V-A Cayman, and Fund V-B Lux) contributes all of its portfolio company assets to the Consolidated Master Fund LP in exchange for a limited partnership interest in the Master Fund. Each contribution satisfies the three requirements of § 721(a): (i) property is contributed (the portfolio company interests, which constitute "property" within the meaning of the Code), (ii) the contribution is made to a partnership (the Master Fund, a Delaware LP classified as a partnership for U.S. federal income tax purposes under Treas. Reg. § 301.7701-3), and (iii) the contributing entity receives an interest in the partnership in exchange for its contribution (each Legacy Offshore Vehicle receives a limited partnership interest in the Master Fund). No cash or other consideration is received by any Legacy Offshore Vehicle in connection with the contribution, and accordingly there is no "boot" involved in any of the contribution transactions.
It is important to note that the contributing entities in each of Steps 2 through 4 are themselves partnerships (the Cayman exempted LPs and Luxembourg SCSps), not individual partners. Section 721(a), however, is not limited in its application to contributions by individuals. By its terms, the statute applies to contributions of property by "any" partner, and the term "partner" as used in Subchapter K encompasses any person that is a partner in a partnership, including another partnership. See IRC § 7701(a)(2) (defining "partnership" and "partner"). The contribution of property by one partnership to another partnership in exchange for a partnership interest is a well-established application of § 721(a), and the IRS and Treasury Department have not limited the nonrecognition rule to contributions by natural persons or corporations. Partnership-to-partnership contributions are routinely treated as nonrecognition events under § 721(a), and there is no basis in the statute, regulations, or published guidance for a contrary result here.
Carryover Basis. Under IRC § 723, the Master Fund will take a carryover basis in each contributed asset equal to the contributing partnership's adjusted tax basis at the time of the contribution. The total carryover basis across all contributed assets is approximately $6.03 billion, as set forth in the aggregate financials in Section V above. The carryover basis preserves the $1.72 billion in aggregate built-in gain, which will be recognized by the Master Fund (and allocated to its partners, including through the feeder vehicles) upon a future taxable disposition of the contributed assets. The § 704(c) allocation rules, discussed in Section X below, will govern the allocation of this built-in gain among the partners of the Master Fund.
Holding Period Tacking. Under IRC § 1223(2), the Master Fund will tack the contributing partnership's holding period for each contributed asset. This holding period tacking is relevant for purposes of determining whether gain or loss on a future disposition of a contributed asset will be characterized as long-term or short-term capital gain or loss. Given that the Fund IV complex has a 2021 vintage and the Fund V complex has a 2023 vintage, the contributed assets should in most cases have holding periods of at least two years at the time of contribution, and the tacking rule will preserve the long-term character of those holding periods.
Risk Level: Low. The application of § 721(a) to the contribution transactions is straightforward and well-supported by the statutory text, the Treasury Regulations, and published IRS guidance. Nevertheless, because of the extraordinary magnitude of the built-in gain ($1.72 billion), the cross-border dimension, and the complexity of the multi-step transaction, we recommend seeking Ruling 1 to confirm the nonrecognition treatment.
B. Section 721(b) — Investment Company Exception
Section 721(b) provides an exception to the general nonrecognition rule of § 721(a). Specifically, § 721(b) states that § 721(a) "shall not apply to gain realized on a transfer of property to a partnership which would be treated as an investment company (within the meaning of section 351(e)) if the partnership were incorporated." In other words, if the Master Fund, hypothetically recast as a corporation, would constitute an "investment company" under IRC § 351(e), then the § 721(a) nonrecognition rule would not apply, and the contributing Legacy Offshore Vehicles would be required to recognize gain on their respective contributions.
Statutory and Regulatory Framework. The investment company concept originates in IRC § 351(e), which provides that § 351 (the corporate nonrecognition analog to § 721) does not apply to a transfer to an "investment company." The term "investment company" is defined in the regulations. Under Treas. Reg. § 1.351-1(c)(1)(ii), a transfer results in the formation of an "investment company" if (i) the transfer results in "diversification" of the transferors' interests and (ii) the transferee holds primarily "stocks, securities, money, notes, options, forward or futures contracts, notional principal contracts, and derivatives" — collectively, investment-type assets. The diversification requirement is examined under the principles of Treas. Reg. § 1.351-1(c)(5) and (6), and the asset composition is evaluated by reference to the character of the transferee's holdings after the transfers.
Analysis. The investment company exception does not apply to the Reorganization for the following reasons:
First, the Consolidated Master Fund LP's portfolio will consist entirely of operating company interests in digital infrastructure businesses and enterprise SaaS platforms. All 23 portfolio companies are actively managed operating businesses, not passive investment vehicles holding publicly traded securities or similar investment assets. The representative portfolio companies illustrate this point:
• NovaBright Data Systems Inc. operates a portfolio of data center facilities, employing technical staff and generating revenue from colocation services, managed hosting, and cloud connectivity.
• Crestline Cloud Solutions LLC operates an enterprise SaaS platform, developing and licensing proprietary software to enterprise customers.
• Veridian Edge Computing Corp. develops and operates edge computing infrastructure, deploying distributed computing nodes at the network edge for latency-sensitive applications.
• Thorngate Fiber Networks LP owns and operates a fiber-optic network spanning multiple metropolitan areas, generating revenue from dark fiber leases, lit services, and wholesale bandwidth.
• Helix SaaS Holdings Ltd. is a holding company for a portfolio of enterprise SaaS businesses, each of which operates an active software business.
None of the 23 portfolio companies is a passive investment vehicle, registered investment company, or entity whose assets consist primarily of publicly traded securities, money market instruments, or similar investment assets. The Master Fund's portfolio is fundamentally an operating business portfolio, not an investment portfolio.
Second, even if the diversification prong were satisfied (which is doubtful, given that the Legacy Offshore Vehicles are contributing substantially the same types of operating company interests in the same industry vertical), the asset composition prong is not satisfied. The Master Fund will not hold "stocks, securities, money, notes, options, forward or futures contracts, notional principal contracts, and derivatives" as its primary assets. It will hold equity interests in operating companies, which are distinguishable from the investment-type assets listed in the regulation.
Conclusion. The Master Fund does not constitute an "investment company" within the meaning of IRC § 351(e) and Treas. Reg. § 1.351-1(c)(1)(ii). Accordingly, the exception in § 721(b) should not apply, and the nonrecognition treatment under § 721(a) should be available for each of the contribution transactions in Steps 2 through 4.
Risk Level: Low. The application of § 721(b) to a fund holding operating company interests in digital infrastructure businesses is clearly inapposite. However, because of the scale of built-in gain ($1.72 billion) and the potential for IRS scrutiny of any transaction of this magnitude, we recommend seeking Ruling 2 to confirm that § 721(b) does not apply. The PLR request will include detailed representations regarding the nature and composition of the Master Fund's portfolio, supported by the Redstone Advisory Group appraisals.
C. Section 723 — Basis of Contributed Property
As noted above, under IRC § 723, the Master Fund will take a carryover basis in each asset contributed by the Legacy Offshore Vehicles, equal to the contributing partnership's adjusted tax basis at the time of the contribution. The total carryover basis for all contributed assets is approximately $6.03 billion. The carryover basis is computed on an asset-by-asset basis and will be documented in PLR Exhibit E (Tax Basis Reconciliation), based on data provided by Caldwell Pierce & Co. LLP. No separate ruling is requested with respect to § 723, as the carryover basis rule follows automatically from the application of § 721(a).
D. Section 1223(2) — Holding Period Tacking
Under IRC § 1223(2), the Master Fund tacks the contributing partnership's holding period for each contributed asset. This rule ensures that the Master Fund's holding period in the contributed assets includes the period during which the Legacy Offshore Vehicles held such assets, which is relevant to the characterization of gain or loss as long-term or short-term upon future dispositions. No separate ruling is requested with respect to § 1223(2).
VII. TAX ANALYSIS — IRC § 367 (INAPPLICABILITY TO PARTNERSHIP-TO-PARTNERSHIP TRANSFERS)
A. Statutory Framework
Section 367 of the Code imposes certain requirements and limitations on tax-free transactions involving foreign corporations. Section 367 was enacted as a "tollcharge" provision to ensure that taxpayers cannot use outbound or inbound corporate reorganizations, formations, or liquidations to shift appreciated assets across the U.S. tax border without recognizing gain.
Section 367(a). IRC § 367(a)(1) provides that, for purposes of certain nonrecognition provisions of the Code, if a United States person transfers property to a foreign corporation in connection with an exchange described in IRC §§ 332, 351, 354, 356, or 361, the foreign corporation "shall not be considered to be a corporation." The effect of this provision is to disqualify the exchange from nonrecognition treatment unless an exception applies (e.g., the "active trade or business" exception under § 367(a)(3) and Treas. Reg. § 1.367(a)-3).
Section 367(b). IRC § 367(b) applies to exchanges described in IRC §§ 332, 351, 354, 355, 356, or 361 "in which the status of a foreign corporation as a corporation is relevant for purposes of" any of those provisions, and authorizes the Secretary to prescribe regulations providing for income inclusion or other adjustments in such transactions. The regulations under § 367(b) address range inbound transactions, including the repatriation of earnings through cross-border reorganizations and liquidations.
Critically, both § 367(a) and § 367(b) by their terms apply only to transfers involving corporations. Section 367(a) addresses transfers of property "to a foreign corporation" in exchanges described in the enumerated corporate nonrecognition provisions (§§ 332, 351, 354, 356, 361). Section 367(b) addresses exchanges in which the "status of a foreign corporation as a corporation" is relevant. Neither provision references transfers to or from partnerships, and neither references § 721 (the partnership contribution provision) among its list of operative sections.
B. Application to the Reorganization
The contributions in Steps 2 through 4 of the Reorganization involve transfers by foreign partnerships (Fund IV-A Cayman, a Cayman Islands exempted LP; Fund IV-B Lux, a Luxembourg SCSp; Fund V-A Cayman, a Cayman Islands exempted LP; and Fund V-B Lux, a Luxembourg SCSp) to a domestic partnership (the Consolidated Master Fund LP, a Delaware LP classified as a partnership under the check-the-box regulations). No corporation — either domestic or foreign — is involved as a transferor or transferee in any of the contribution transactions. The contributions are governed by IRC § 721(a) (partnership contributions), not by any of the corporate nonrecognition provisions referenced in § 367 (§§ 332, 351, 354, 356, 361).
Accordingly, IRC § 367(a) does not apply to any step of the Reorganization because:
(i) The transferee (the Consolidated Master Fund LP) is not a "foreign corporation" — it is a domestic partnership;
(ii) The transferors (the Legacy Offshore Vehicles) are not "corporations" — they are partnerships; and
(iii) The contributions are described in IRC § 721(a), which is not among the operative exchange sections enumerated in § 367(a)(1) (§§

MEMORANDUM

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

ENGAGEMENT: 20250527-SDILP-PLR

I. EXECUTIVE SUMMARY

II. BACKGROUND AND PARTIES

III. BUSINESS RATIONALE FOR THE REORGANIZATION

V. AGGREGATE FINANCIALS OF THE REORGANIZATION

Record

Parties

Dates

Amounts