Mandatory Redeemable Preferred - Equity Not Debt, According to IRS
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SEPTEMBER 22, 2010
On June 25, 2010, the Internal Revenue Service (the "Service") released a copy of a private letter ruling ("PLR") addressing a class of preferred shares issued by closed-end funds as a form of refinancing for auction rate preferred shares; it is the first PLR that the Service has issued pursuant to newly liberalized ruling guidelines for resolving the debt/equity treatment of certain corporate instruments. The change in guidelines, announced in early 2010 (see Revenue Procedure 2010-3, ?