IRS Private Letter Ruling 200148042 - Reverse Exchange

For a Customer to obtain the benefits of the safe harbor rules of Rev. Proc. 2000-37, the transaction need only fit within the confines of the safe harbor rules. Assuming the boundaries of the safe harbor rules are not exceeded, the Customer is entitled to enjoy the protection afforded to all compliant taxpayers by these rules, notwithstanding inconsistent treatment or characterization under state or local law. Thus, a statement in the QEA Agreement that LLC (whose activities and assets are attributed to (“Exchangor" or "Exchanger") Individual or entity desiring an exchange. Taxpayer ) is acting as agent of Customer for all purposes other than federal income tax purposes, will not affect the qualification of the QEA Agreement or the QEAA.

Accordingly, the inclusion of a statement in the QEA Agreement that “[LLC] is acting solely as [Customer’s] agent for all purposes except for federal income tax purposes” will have no adverse affect on the qualification of the QEA Agreement under Rev. Proc. 2000-37.