CALDERWOOD & HARKNESS LLP Attorneys at Law
1900 K Street NW, Suite 1100 Washington, DC 20006
Telephone: (202) 555-7400 Facsimile: (202) 555-7401 www.calderwoodharkness.com
June 2, 2025
VIA EMAIL AND Sundial Data Systems
Helen Okamoto, Partner Financial Services Tax Caldwell Pierce & Co. LLP 400 Renaissance Center, Suite 2500 Detroit, MI 48243
Re: Data Request — Solara Digital Infrastructure LP Cross-Border Fund-Platform Reorganization; Private Letter Ruling Submission Calderwood & Harkness Engagement No. 20250527-SDILP-PLR
Dear Ms. Okamoto:
I write on behalf of Leonard Cross, Responsible Partner, Tax, of Calderwood & Harkness LLP, in connection with our representation of Solara Digital Infrastructure LP (EIN 82-4917366) and its affiliated fund vehicles. Calderwood & Harkness has been engaged to prepare and submit a private letter ruling request to the Internal Revenue Service, Office of the Associate Chief Counsel (International) ("CC:INTL"), concerning the federal income tax treatment of a multi-step cross-border reorganization of Solara's fund platform (the "Reorganization"). The PLR request will address, among other issues, the tax consequences arising from the domestication and merger of several Cayman Islands and Luxembourg fund vehicles into a newly established Delaware-domiciled master fund structure, including the treatment of built-in gain and loss accounts under Internal Revenue Code ("IRC") § 704(c), the allocation and assumption of liabilities under IRC § 752, and related cross-border withholding and reporting considerations.
As Solara's independent accounting firm and tax compliance provider, Caldwell Pierce & Co. LLP ("Caldwell Pierce") possesses historical financial data, tax returns, workpapers, and related records that are essential to completing the PLR submission, and in particular the supporting exhibits and the quantitative analyses required under IRC §§ 752 and 704(c). We understand that Caldwell Pierce has served as Solara's primary tax return preparer and auditor for the fund vehicles identified herein since their respective formation dates, and accordingly maintains comprehensive records spanning the full operational history of each vehicle.
Our target date for submitting the PLR request to the IRS is August 15, 2025. In order to allow sufficient time for detailed tax analysis, exhibit preparation, internal review, client review, and a pre-submission conference with CC:INTL, we respectfully request that Caldwell Pierce provide the data and documents enumerated in this letter by no later than July 1, 2025. Certain priority items, as identified in Section V below, are needed by June 16, 2025, to support the preparation of an initial tax analysis memorandum that will form the analytical backbone of the PLR submission.
We appreciate your cooperation and that of your team in connection with this request. The balance of this letter sets forth the background context, identifies the specific fund vehicles covered by this request, and enumerates the categories of documents and data we require.
I. BACKGROUND AND SCOPE OF REORGANIZATION
The following summary is provided for context to assist Caldwell Pierce in identifying responsive documents and data. It is not intended to be a comprehensive description of the Reorganization, which will be set forth in detail in the PLR submission itself.
Solara Digital Infrastructure LP is a Delaware limited partnership formed on March 17, 2014, with assets under management of approximately $14.7 billion as of March 31, 2025. Solara sponsors private equity funds targeting digital infrastructure investments — including data centers, fiber-optic networks, and edge computing facilities — as well as enterprise software-as-a-service ("SaaS") platforms. The general partner of Solara Digital Infrastructure LP is Solara Digital Infrastructure GP LLC (EIN 82-4917365), a Delaware limited liability company managed by Viktor Raines, Managing Partner and Founder.
The Reorganization involves the consolidation of four offshore parallel fund vehicles — two domiciled in the Cayman Islands and two domiciled in Luxembourg — into a newly formed Delaware-domiciled vehicle, Solara Consolidated Master Fund LP (the "Consolidated Master Fund"). In connection with the formation of the Consolidated Master Fund, Solara intends to establish two new Cayman Islands feeder vehicles to accommodate non-U.S. investors and U.S. tax-exempt investors, respectively. The Reorganization is being undertaken to simplify the fund platform's organizational structure, reduce administrative costs, and enhance operational efficiency in light of the increasing scale and complexity of Solara's portfolio.
The PLR request will address the federal income tax consequences of the multi-step transaction, with particular emphasis on (a) the treatment of contributed property with built-in gain under IRC § 704(c) upon the transfer of assets from the offshore vehicles to the Consolidated Master Fund; (b) the allocation and assumption of liabilities under IRC § 752 and the impact on partners' bases in their partnership interests; (c) the characterization of the transaction steps under the partnership anti-abuse rule of Treas. Reg. § 1.701-2 and the disguised sale rules of IRC § 707(a)(2)(B); and (d) related cross-border considerations, including withholding obligations under IRC §§ 1441, 1442, and 1446, and the treatment of U.S. real property interests under IRC § 897 (FIRPTA).
This data request covers all six existing fund vehicles across three jurisdictions (Delaware, Cayman Islands, and Luxembourg), as well as the three general partner and management entities associated with those vehicles, as identified in Section II below.
II. IDENTIFICATION OF FUND VEHICLES COVERED BY THIS REQUEST
For purposes of this data request, the term "Fund Vehicles" refers collectively to the six fund entities identified below, organized by fund complex. References to "Fund IV Vehicles" mean the three entities listed under subsection A, and references to "Fund V Vehicles" mean the three entities listed under subsection B.
A. Fund IV Complex
1. Solara Digital Partners Fund IV LP
• Jurisdiction: Delaware limited partnership
• EIN: 85-2103748
• Fund Size: $4.2 billion (vintage 2021; approximately 72% deployed as of March 31, 2025)
• General Partner: Solara Digital Infrastructure GP LLC
• Registered Agent: Pemberton Industries, 251 Little Falls Drive, Wilmington, DE 19808
2. Solara Digital Partners Fund IV-A (Cayman) LP
• Jurisdiction: Cayman Islands exempted limited partnership
• U.S. EIN: 98-6241503
• CIMA Registration: MF-72491
• Registered Office: Harborstone Corporate Services Ltd., P.O. Box 2714, 94 Solaris Avenue, George Town, Grand Cayman KY1-1111
• Fund Size: $1.85 billion
• General Partner: Solara Offshore GP Ltd.
3. Solara Digital Partners Fund IV-B (Luxembourg) SCSp
• Jurisdiction: Luxembourg special limited partnership (société en commandite spéciale)
• U.S. EIN: 98-6241571
• Luxembourg RCS Number: B 248193
• Registered Office: 14, rue Jean-Pierre Brasseur, L-1258 Luxembourg
• Fund Size: €1.15 billion (approximately $1.24 billion at EUR/USD 1.08)
• General Partner: Solara Luxembourg Management S.à r.l. (RCS B 248194)
B. Fund V Complex
4. Solara Digital Partners Fund V LP
• Jurisdiction: Delaware limited partnership
• EIN: 88-3467219
• Fund Size: $5.6 billion (vintage 2023; approximately 38% deployed as of March 31, 2025)
• General Partner: Solara Digital Infrastructure GP LLC
• Registered Agent: Pemberton Industries, 251 Little Falls Drive, Wilmington, DE 19808
5. Solara Digital Partners Fund V-A (Cayman) LP
• Jurisdiction: Cayman Islands exempted limited partnership
• U.S. EIN: 98-7891234
• CIMA Registration: MF-89103
• Registered Office: Harborstone Corporate Services Ltd., P.O. Box 2714, 94 Solaris Avenue, George Town, Grand Cayman KY1-1111
• Fund Size: $2.45 billion
• General Partner: Solara Offshore GP Ltd.
6. Solara Digital Partners Fund V-B (Luxembourg) SCSp
• Jurisdiction: Luxembourg special limited partnership (société en commandite spéciale)
• U.S. EIN: 98-7891267
• Luxembourg RCS Number: B 271056
• Registered Office: 14, rue Jean-Pierre Brasseur, L-1258 Luxembourg
• Fund Size: €1.38 billion (approximately $1.49 billion at EUR/USD 1.08)
• General Partner: Solara Luxembourg Management S.à r.l. (RCS B 248194)
C. General Partners / Management Entities
In addition to the six Fund Vehicles, this request covers the following general partner and management entities to the extent they hold records relevant to the Fund Vehicles' tax reporting and the Reorganization:
• Solara Digital Infrastructure GP LLC (EIN 82-4917365) — Delaware limited liability company; general partner of Fund IV LP and Fund V LP
• Solara Offshore GP Ltd. — Cayman Islands exempted company; general partner of Fund IV-A (Cayman) LP and Fund V-A (Cayman) LP
• Solara Luxembourg Management S.à r.l. (RCS B 248194) — Luxembourg société à responsabilité limitée; general partner (gérant commandité) of Fund IV-B (Luxembourg) SCSp and Fund V-B (Luxembourg) SCSp
III. REQUESTED DOCUMENTS AND DATA
We request that Caldwell Pierce provide the following documents, data, and records for each of the Fund Vehicles identified in Section II. Where a particular request applies to fewer than all six Fund Vehicles, we have so noted. Unless otherwise specified, each request covers the three most recent tax years (2022, 2023, and 2024, or the most recent filed year if 2024 returns have not yet been completed).
A. U.S. Federal Income Tax Returns
1. Complete copies of U.S. federal income tax returns (IRS Form 1065, including all schedules and attachments) for each of the six Fund Vehicles for tax years 2022, 2023, and 2024. If the 2024 returns have not yet been filed or completed, please provide the most recently filed returns and any available draft or work-in-progress versions of the 2024 returns together with an indication of the anticipated filing date.
2. All amendments or supplemental filings (including IRS Form 1065X) to the returns described in paragraph 1 above, for any tax year.
3. Any IRS correspondence related to the six Fund Vehicles received within the last five tax years (2020 through 2024), including but not limited to:
(a) Examination or audit letters (including IRS Letter 2205 or equivalent notification of examination);
(b) Information document requests ("IDRs") issued by the IRS in connection with any examination;
(c) Notices of proposed adjustment ("NOPAs") or revenue agent reports ("RARs");
(d) Notices of deficiency or notices of final partnership adjustment under the centralized partnership audit regime of IRC § 6221 et seq. (as amended by the Bipartisan Budget Act of 2015);
(e) Any closing agreements, settlement agreements, or similar dispositive correspondence; and
(f) Any technical advice memoranda requested or received in connection with any of the foregoing.
B. Schedules K-1
1. Complete Schedules K-1 (IRS Form 1065) for all partners and limited partners of each of the six Fund Vehicles for tax years 2022, 2023, and 2024 (or the most recent filed year, as applicable). This request encompasses all K-1s issued to all investors, including the general partner entities, carried interest vehicles, and any co-investment vehicles.
2. To the extent any Schedules K-1 reflect special allocations, curative allocations, or remedial allocations under IRC § 704(c), please identify such items separately and provide the supporting workpapers, allocation models, and any memoranda documenting the methodology applied. We are particularly interested in understanding the interaction between the § 704(c) allocation layers and the book-tax differences reflected on the K-1s, as this analysis will be central to the PLR submission.
3. In addition to the complete K-1 sets requested above, the Schedules K-1 for the following representative limited partners are of particular interest to our analysis, and we request that any segregated data, supplementary partner-level schedules, or detailed allocation workpapers related to these investors be separately identified and provided:
(a) Pinnacle State Employees' Retirement System — Fund IV LP commitment: $275 million; Fund V LP commitment: $340 million. As a U.S. tax-exempt investor, the UBTI and debt-financed income allocations to Pinnacle are relevant to the Reorganization analysis.
(b) Grandview University Endowment — Fund IV LP commitment: $120 million; Fund V LP commitment: $185 million. Similarly, the UBTI analysis for this tax-exempt investor is relevant.
(c) Nordhaven Sovereign Wealth Fund — Fund IV-A (Cayman) LP commitment: $380 million; Fund V-A (Cayman) LP commitment: $500 million. As a non-U.S. sovereign wealth fund, the tax treatment of Nordhaven under IRC § 892 and the interaction with the Reorganization is a significant issue in the PLR request.
(d) Kestrel Pacific Insurance Group — Fund IV-B (Luxembourg) SCSp commitment: €200 million; Fund V-B (Luxembourg) SCSp commitment: €275 million. Kestrel's status as a non-U.S. insurance company raises questions under the insurance company provisions and applicable treaty benefits.
(e) Argyle Family Office Holdings LLC — Fund IV LP commitment: $95 million; Fund V LP commitment: $130 million. As a domestic taxable investor, Argyle serves as a useful reference point for analyzing the baseline tax consequences of the Reorganization.
C. Tax-Basis Balance Sheets
1. Tax-basis balance sheets (IRS Form 1065, Schedule L, prepared on a tax basis, or equivalent internal workpapers and trial balances) for each of the six Fund Vehicles as of the most recent fiscal year-end (December 31, 2024, or the most recent completed fiscal year) and as of the most recent available interim date (preferably March 31, 2025, or later, if available). To the extent that Caldwell Pierce maintains working trial balances or interim tax-basis balance sheets that are more current than the fiscal year-end statements, those interim records would be highly valuable to our analysis.
2. For each Fund Vehicle, a detailed reconciliation of GAAP (or IFRS, as applicable) book basis to U.S. federal income tax basis for all material asset categories, including but not limited to:
(a) Portfolio company equity interests (both consolidated and unconsolidated);
(b) Debt instruments and convertible instruments;
(c) Cash and cash equivalents, including amounts held in subscription credit facility reserve accounts;
(d) Accrued management fees, carried interest, and organizational expenses;
(e) Deferred financing costs and capitalized transaction expenses; and
(f) Any other material asset category.
3. The Reorganization will involve the transfer of assets from the four offshore Fund Vehicles to the Consolidated Master Fund. The following is our current understanding of the aggregate fair market values, adjusted tax bases, and built-in gains associated with these four vehicles' asset portfolios, and we request that Caldwell Pierce confirm, correct, or supplement these figures based on its records:
(a) Fund IV-A (Cayman) LP: Aggregate fair market value: $2.31 billion; aggregate adjusted tax basis: $1.62 billion; aggregate built-in gain: $690 million.
(b) Fund IV-B (Luxembourg) SCSp: Aggregate fair market value: €1.07 billion / $1.16 billion; aggregate adjusted tax basis: €782 million / $844.6 million; aggregate built-in gain: €288 million / $311 million.
(c) Fund V-A (Cayman) LP: Aggregate fair market value: $2.89 billion; aggregate adjusted tax basis: $2.34 billion; aggregate built-in gain: $550 million.
(d) Fund V-B (Luxembourg) SCSp: Aggregate fair market value: €1.29 billion / $1.39 billion; aggregate adjusted tax basis: €1.14 billion / $1.23 billion; aggregate built-in gain: €150 million / $162 million.
4. Based on the foregoing, our preliminary estimate of the total aggregate fair market value of assets to be transferred to the Consolidated Master Fund is approximately $7.75 billion, with a total adjusted tax basis of approximately $6.03 billion and a total aggregate built-in gain of approximately $1.72 billion. Please confirm whether these aggregate figures are consistent with Caldwell Pierce's records, and provide any corrections or adjustments with supporting detail.
D. IRC § 704(c) Built-In Gain/Loss Tracking Records
1. Complete IRC § 704(c) built-in gain and built-in loss accounts for each item of contributed property held by each of the six Fund Vehicles, current through the most recent allocation period (i.e., the most recent fiscal year-end or, if available, the most recent interim allocation date). These records should include the initial built-in gain or loss at the time of contribution, cumulative allocations made to date, and the remaining built-in gain or loss balance for each contributed property. The accuracy and completeness of these records are critical to the PLR analysis, as the Reorganization will trigger a "contribution" of the offshore vehicles' assets to the Consolidated Master Fund, creating new § 704(c) layers that must be layered on top of any existing § 704(c) accounts.
2. Identification of the allocation method elected under Treas. Reg. § 1.704-3 for each item of contributed property held by each Fund Vehicle. We understand that Solara has generally elected the remedial allocation method under Treas. Reg. § 1.704-3(d) for its contributed properties, but we request confirmation of this understanding on a property-by-property basis. If any properties are subject to the traditional method under Treas. Reg. § 1.704-3(b) or the traditional method with curative allocations under Treas. Reg. § 1.704-3(c), please so indicate and provide the election documentation and supporting rationale.
3. Detailed § 704(c) schedules for the following representative portfolio company interests, which represent the most significant built-in gain positions across the Fund Vehicles and will be the subject of detailed illustrative examples in the PLR submission:
(a) NovaBright Data Systems Inc. — Delaware corporation; data center operator. Fair market value: $890 million; adjusted tax basis: $520 million; built-in gain: $370 million. NovaBright is held by Fund IV-A (Cayman) LP (60% interest) and Fund IV LP (40% interest). Please provide the § 704(c) accounts for each Fund Vehicle's interest in NovaBright separately.
(b) Crestline Cloud Solutions LLC — Delaware limited liability company (treated as a disregarded entity for U.S. federal income tax purposes). Fair market value: €340 million ($367 million at EUR/USD 1.08); adjusted tax basis: €195 million ($211 million); built-in gain: €145 million ($156 million). Crestline is held 100% by Fund IV-B (Luxembourg) SCSp. Please provide the § 704(c) accounts in both EUR and USD.
(c) Veridian Edge Computing Corp. — Delaware corporation; edge computing infrastructure provider. Fair market value: $1.12 billion; adjusted tax basis: $780 million; built-in gain: $340 million. Veridian is held by Fund V-A (Cayman) LP (55% interest) and Fund V LP (45% interest). Please provide the § 704(c) accounts for each Fund Vehicle's interest separately.
(d) Thorngate Fiber Networks LP — Delaware limited partnership; fiber-optic network operator. Fair market value: $670 million; adjusted tax basis: $490 million; built-in gain: $180 million. Thorngate is held 100% by Fund IV-A (Cayman) LP.
(e) Helix SaaS Holdings Ltd. — Cayman Islands exempted company; SaaS holding company. Fair market value: $445 million; adjusted tax basis: $310 million; built-in gain: $135 million. Helix is held 100% by Fund V-A (Cayman) LP.
4. Built-in gain/loss tracking records for all remaining portfolio companies held across the Fund Vehicles. We understand that the Fund IV Vehicles hold a total of eleven (11) portfolio company interests and the Fund V Vehicles hold a total of twelve (12) portfolio company interests, for a combined total of twenty-three (23) portfolio company interests across all Fund Vehicles (with the five representative companies listed above constituting a subset of this total). Please provide complete § 704(c) accounts for each of the twenty-three portfolio companies, organized by Fund Vehicle.
E. IRC § 752 Liability Data
1. Complete schedules of all liabilities — both recourse and nonrecourse — of each of the six Fund Vehicles as of the most recent available date (preferably March 31, 2025, or later). These schedules should include all indebtedness, contingent liabilities, guarantees, indemnification obligations, and any other obligations treated as liabilities for purposes of IRC § 752 and the regulations thereunder.
2. Our preliminary analysis indicates that the aggregate liabilities across the four offshore Fund Vehicles to be assumed by (or allocated to partners of) the Consolidated Master Fund total approximately $1.34 billion. Please confirm this figure and provide a detailed breakdown of these liabilities organized by:
(a) Fund Vehicle (i.e., the specific offshore entity to which the liability relates);
(b) Liability type, distinguishing among recourse liabilities, nonrecourse liabilities, and qualified nonrecourse financing (within the meaning of Treas. Reg. § 1.752-1(a)(1), (a)(2), and § 1.752-3(a)(3), respectively);
(c) Creditor identity, including the full legal name and jurisdiction of organization of each lender or creditor;
(d) Principal amount outstanding as of the most recent available date;
(e) Whether the liability is a partner-level obligation (e.g., a deficit restoration obligation, guarantee, or indemnity) or an entity-level obligation; and
(f) Any material terms relevant to the § 752 analysis, including subordination arrangements, cross-collateralization provisions, and acceleration triggers.
3. Current partner-level allocations of each liability under Treas. Reg. §§ 1.752-1 through 1.752-5, including:
(a) For recourse liabilities: identification of each partner bearing the economic risk of loss within the meaning of Treas. Reg. § 1.752-2, including the amount of economic risk of loss borne by each such partner and the basis for such determination (e.g., guarantee, deficit restoration obligation, or other contractual arrangement);
(b) For nonrecourse liabilities: each partner's share of minimum gain under Treas. Reg. § 1.704-2, the amount of § 704(c) minimum gain allocable to each partner, and each partner's share of excess nonrecourse liabilities based on profit-sharing ratios; and
(c) For qualified nonrecourse financing: identification of the activity to which such financing relates and the allocation methodology applied.
4. Information regarding the subscription credit facilities maintained by the Fund IV and Fund V complexes:
(a) Fund IV Subscription Credit Facility: $1.1 billion revolving credit facility with Ashford National Bank, N.A. as sole lender. Please provide the current outstanding balance, the borrowing base calculation (including the unfunded capital commitments pledged as collateral), the maturity date, and copies of any ancillary guarantees, pledges, or security agreements related to this facility.
(b) Fund V Subscription Credit Facility: $1.5 billion revolving credit facility with Ashford National Bank, N.A. as co-lender and Sentinel Capital Markets LLC as administrative agent. Please provide the current outstanding balance, the borrowing base calculation, the maturity date, and copies of any ancillary guarantees, pledges, or security agreements related to this facility. If additional lenders participate in the syndicate, please identify each lender and its commitment amount.
The § 752 liability data is of particular importance to the PLR submission because the Reorganization will result in a shift of liabilities among partners as the offshore vehicles' assets and liabilities are transferred to the Consolidated Master Fund. Under IRC § 752(b), deemed distributions of money arising from decreases in a partner's share of partnership liabilities could trigger gain recognition, and the quantification of this exposure is a central component of the ruling request.
F. Capital Account Data
1. Capital account statements, maintained on both a tax basis and a book (GAAP or § 704(b)) basis, for each partner in each of the six Fund Vehicles as of the most recent fiscal year-end (December 31, 2024, or the most recently completed fiscal year) and as of the most recent available interim date (preferably March 31, 2025, or later).
2. Historical capital contribution and distribution records for each Fund Vehicle from inception through the most recent available date. For reference, the inception dates of the Fund Vehicles are as follows:
(a) Fund IV LP and Fund IV-A (Cayman) LP: inception June 15, 2021;
(b) Fund IV-B (Luxembourg) SCSp: inception June 15, 2021 (or the actual date of formation under Luxembourg law, if different);
(c) Fund V LP and Fund V-A (Cayman) LP: inception September 30, 2023;
(d) Fund V-B (Luxembourg) SCSp: inception September 30, 2023 (or the actual date of formation under Luxembourg law, if different).
3. Details of any special allocation provisions reflected in capital account maintenance under IRC § 704(b) and the regulations thereunder, including but not limited to:
(a) Carried interest allocation provisions (including any catch-up, clawback, or preferred return waterfall provisions);
(b) Management fee offset or waiver arrangements;
(c) Organizational expense allocations;
(d) Any other special allocations required by the limited partnership agreements that affect capital account balances; and
(e) Any qualified income offset provisions or minimum gain chargeback provisions as required by Treas. Reg. § 1.704-1(b)(2)(ii)(d) and § 1.704-2(f), respectively.
G. Entity Classification Records
1. Copies of any IRS Form 8832 (Entity Classification Election) filed for any of the six Fund Vehicles, the three general partner/management entities, or any predecessor or successor entities, for any period. This includes initial classification elections, changes in classification, and any protective elections. If no Form 8832 was filed for a particular entity because the entity's classification was determined by the default classification rules of Treas. Reg. § 301.7701-3(b), please so confirm and indicate the default classification relied upon.
2. Copies of organizational documents for each Fund Vehicle and each general partner/management entity, including:
(a) Limited partnership agreements (including all amendments and side letters to the extent they affect tax allocations or entity classification);
(b) Partnership agreements or operating agreements;
(c) Articles of association, articles of incorporation, or equivalent constitutional documents under Cayman Islands or Luxembourg law; and
(d) Any formation certificates, certificates of registration, or equivalent governmental filings.
We understand that Solara's in-house legal team — specifically Priya Narasimhan, General Counsel, and Stefan Dalmqvist, Head of Tax — may have already provided certain of these organizational documents to Calderwood & Harkness. To the extent Caldwell Pierce maintains copies of documents that have not yet been provided to us, or that differ from versions in our possession, we request that those be included in the document production.
H. Financial Statements (Audited)
1. Audited financial statements (prepared in accordance with U.S. GAAP for the Delaware Fund Vehicles or IFRS for the Luxembourg Fund Vehicles, as applicable) for each of the six Fund Vehicles for the three most recent fiscal years (2022, 2023, and 2024, or the most recently completed fiscal year). These should include the balance sheet, statement of operations, statement of changes in partners' capital (or net assets), statement of cash flows, and all notes to the financial statements.
2. Any management letters, internal control deficiency communications, or other written communications issued by Caldwell Pierce to the management of Solara or any of the Fund Vehicles in connection with the audits described in paragraph 1 above. To the extent that any management letter observations relate to tax reporting, § 704(c) tracking, capital account maintenance, or liability allocations, we request that those items be specifically flagged for our attention.
3. Net asset value ("NAV") reports prepared by Clarendon Fund Services Ltd. (fund administrator; Windward 3, Regatta Office Park, West Bay Road, George Town, Grand Cayman KY1-1108) for the offshore Fund Vehicles (Fund IV-A Cayman, Fund IV-B Luxembourg, Fund V-A Cayman, and Fund V-B Luxembourg), to the extent that Caldwell Pierce has copies of or access to such reports. We are particularly interested in the most recent quarterly NAV report (March 31, 2025) and the year-end NAV reports for 2022, 2023, and 2024.
I. FATCA and CRS Reporting
1. Copies of all FATCA reporting for the four offshore Fund Vehicles (Fund IV-A Cayman, Fund IV-B Luxembourg, Fund V-A Cayman, and Fund V-B Luxembourg) for the most recent reporting period, including:
(a) IRS Form 8966 (FATCA Report) filed with respect to each offshore Fund Vehicle;
(b) Any FATCA registration confirmations or Global Intermediary Identification Numbers ("GIINs") assigned to the offshore Fund Vehicles;
(c) Any intergovernmental agreement ("IGA") reporting filed with Cayman Islands or Luxembourg tax authorities under Model 1 or Model 2 IGA frameworks; and
(d) Any FATCA compliance certifications or responsible officer certifications.
2. Common Reporting Standard ("CRS") filings for the Cayman Islands and Luxembourg Fund Vehicles, to the extent maintained by Caldwell Pierce or accessible through Caldwell Pierce's engagement records. We recognize that CRS filings may be prepared by the fund administrator (Clarendon Fund Services Ltd.) or local counsel rather than by Caldwell Pierce, but request that any CRS-related records in Caldwell Pierce's possession be included in the production.
J. Withholding and Reporting Data (IRC § 1446)
1. Records of any withholding under IRC § 1446 on effectively connected taxable income ("ECTI") allocable to foreign partners of any of the six Fund Vehicles for tax years 2022, 2023, and 2024 (or the most recent filed year). This includes both the § 1446(a) withholding on ECTI allocable to foreign partners and any § 1446(f) withholding on transfers of partnership interests by foreign partners, if applicable.
2. Copies of the following IRS forms filed in connection with § 1446 withholding:
(a) IRS Form 8804 (Annual Return for Partnership Withholding Tax — Section 1446);
(b) IRS Form 8805 (Foreign Partner's Information Statement of Section 1446 Withholding Tax); and
(c) IRS Form 8813 (Partnership Withholding Tax Payment Voucher — Section 1446).
3. Identification of all foreign partners subject to § 1446 withholding, including the applicable withholding rate (21% for corporate foreign partners or 37% for noncorporate foreign partners, or the applicable treaty rate, if any), and the aggregate withholding amounts for each tax year. We note that the following limited partners are of particular relevance given their expected continued investment through the post-Reorganization structure:
(a) Nordhaven Sovereign Wealth Fund — investor in Fund IV-A (Cayman) LP and Fund V-A (Cayman) LP; potential application of IRC § 892 exemption for foreign government income; and
(b) Kestrel Pacific Insurance Group — investor in Fund IV-B (Luxembourg) SCSp and Fund V-B (Luxembourg) SCSp; potential treaty benefits under the applicable U.S.-Luxembourg or other bilateral income tax treaty.
K. FIRPTA / IRC § 897 Records
1. Any analysis, determination, memorandum, or workpaper previously prepared by Caldwell Pierce (whether in connection with the annual tax compliance process, investor reporting, or otherwise) regarding whether any portfolio company interests held by the Fund Vehicles constitute "United States real property interests" ("USRPIs") within the meaning of IRC § 897(c). This includes any analyses of whether any portfolio company constitutes a "United States real property holding corporation" ("USRPHC") under IRC § 897(c)(2) based on the ratio of U.S. real property interests to total assets.
2. We request particular attention to data center and fiber-optic network assets, where the characterization of underlying tangible assets as real property may be relevant to the FIRPTA analysis. Specifically:
(a) NovaBright Data Systems Inc. — As a data center operator, NovaBright may hold significant real property assets (land, buildings, structural improvements) as well as tangible personal property (servers, cooling systems, electrical distribution equipment). Please provide any analysis of the USRPHC status of NovaBright and, to the extent available, a breakdown of NovaBright's assets between real property interests and non-real property interests.
(b) Thorngate Fiber Networks LP — As a fiber-optic network operator, Thorngate holds rights-of-way, easements, conduit, and related infrastructure that may constitute real property interests under applicable Treasury Regulations. Please provide any analysis of the USRPHC status of Thorngate and, to the extent available, a breakdown of Thorngate's assets between real property interests and non-real property interests.
The FIRPTA analysis is relevant to the PLR submission because the transfer of interests in USRPHCs from the offshore Fund Vehicles to the Consolidated Master Fund could trigger FIRPTA withholding obligations under IRC § 1445 and recognition of gain under IRC § 897(a) with respect to foreign partners. Understanding the USRPHC status of each portfolio company is therefore essential to the structuring analysis.
IV. FORMAT AND DELIVERY INSTRUCTIONS
To facilitate efficient review and integration into our working files, we request that all responsive documents and data be provided in accordance with the following format and delivery instructions:
1. File Format: All documents should be provided in electronic format. Tax returns, financial statements, organizational documents, IRS correspondence, and similar narrative or fixed-format documents should be provided in PDF format (searchable/OCR preferred). Schedules, workpapers, tracking records, capital account statements, liability schedules, and other tabular data should be provided in Microsoft Excel format (.xlsx), with formulas intact and cells unlocked to the extent practicable, to allow our team to perform independent verification and cross-referencing.
2. Delivery Method: All materials should be delivered via Calderwood & Harkness's encrypted file transfer portal. Detailed access instructions, including login credentials and upload procedures, will be provided separately by Robert Jansen under separate cover. Please do not transmit responsive documents via unencrypted email.
3. Organization: Please organize all deliverables by Fund Vehicle (using the six entity names set forth in Section II) and, within each Fund Vehicle folder, by request category (A through K, as set forth in Section III above). A suggested folder structure is as follows:
• [Fund Vehicle Name] / A — Tax Returns
• [Fund Vehicle Name] / B — Schedules K-1
• [Fund Vehicle Name] / C — Tax-Basis Balance Sheets
• [Fund Vehicle Name] / D — Section 704(c) Records
• [Fund Vehicle Name] / E — Section 752 Liability Data
• [Fund Vehicle Name] / F — Capital Account Data
• [Fund Vehicle Name] / G — Entity Classification Records
• [Fund Vehicle Name] / H — Financial Statements
• [Fund Vehicle Name] / I — FATCA and CRS Reporting
• [Fund Vehicle Name] / J — Section 1446 Withholding
• [Fund Vehicle Name] / K — FIRPTA / Section 897 Records
4. Currency Conversion: For any Luxembourg-denominated items, please provide both EUR amounts and USD equivalents using the EUR/USD 1.08 exchange rate, which is the rate consistently applied across all Solara reporting for the current period. If historical periods used a different exchange rate convention, please note the applicable rate and provide a reconciliation.
V. TIMELINE AND PRIORITY
The overall timeline for this engagement is driven by the August 15, 2025 target date for submission of the PLR request to the IRS. To meet this deadline, we have established the following internal drafting and review milestones:
In light of these milestones, we request the following:
Priority Items — Due June 16, 2025: The following categories of data are needed on an expedited basis to support the preparation of the initial tax analysis memorandum, which will form the analytical foundation for the entire PLR submission:
(a) Tax-basis balance sheets for all four offshore Fund Vehicles (Request C, paragraphs 1 through 4);
(b) IRC § 704(c) built-in gain/loss tracking records for all Fund Vehicles (Request D, paragraphs 1 through 4); and