Extract to table
Pull the structured facts out of a document: parties, dates, amounts, obligations.
Extract to table / tax-memo-section-721b-investment-company.docx
tax-memo-section-721b-investment-company.docx
Parties
Harkness LLP
Solara Consolidated Master Fund LP
Solara Digital Infrastructure LP
Platform Solara Digital Infrastructure LP
Solara Digital Infrastructure GP LLC
Digital Partners Fund IV LP
Solara Offshore GP Ltd
Harborstone Corporate Services Ltd
Dates
June 16, 2025
March 17, 2014
March 31, 2025
December 1, 2025
September 15, 2025
October 1, 2025
October 15, 2025
November 1, 2025
April 22, 2025
Amounts
$7.75
$6.03
$1.72
$14.7
$4.2
$1.85
€1.15
$1.24
1.08 EUR
$5.6
Obligations
The cross-referenced provision, IRC § 351(e)(1), provides in relevant part: "If — (A) the transfer results, directly or indirectly, in diversification of the transferors' interests, and (B) the transferee is (as of the time of the transfer) described in subparagraph (C), then for purposes of section 351, such transfer shall not be treated as one to which section 351 applies
The critical qualifier is that the assets must be "readily marketable" — a condition that private, illiquid, non-traded operating company interests manifestly fail to satisfy
The Diversification Requirement The § 721(b) exception applies only if both elements of the § 351(e)(1) test are satisfied: (1) the transferee must meet the 80% investment asset threshold, and (2) the transfer must result, directly or indirectly, in diversification of the transferors' interests
Both conditions must be present for § 721(b) to override the nonrecognition rule of § 721(a)