2108004 Informal Interpretation

She inberg, Samuel I.
From: 	HSR Help
Sent: 	Thursday, Auqust 5, 2021 3:59 PM
To: 	Walsh, Kat h ry n E.; Berg, Kare n E.; Sheinberg, Samuel I.; Six, An ne; Whitehead, No ra ; Musick, Vesse li na
S ubj ect: 	FW: Query re : Section 1031 Like-Ki nd Excha n ge of Assets
From : Shaffer, Kr istin < kshaffer@ftc.gov>
Se nt : Thursday, August 5, 2021 3:59: 10 PM (UTC-05 :00) Eastern Time (US & Canada)
To:
Cc:
uery re: Section 1031 Like-Ki nd Exchange of Assets
Yes, th is should be analyzed as A acquiring assets from Band B acquiring assets from A.
-Best regards,
Kr istin
Kri st in Sh affer
Attorney
Premerger Notification Office
Federal Trade Commission
202-326-2388 I kshaffer@hc.gov
From :
Se nt : Thursday, August 5, 20211 :25 PM
To: HSRHe lp <HSRHe lp@ftc.gov>
Cc :
Subject : Query re: Section 1031 Like-Kind Exchange of Assets
Good afternoon,
Hope th is finds you we ll. In connection with an ant icipated t ransaction, we ( as counsel to the respective parties) are
hoping to get your feedback on the applicability of prior staff informal interpretat ions w ith respect to the facts below.
Company A owns a 40% interest in a mining claim (the remaini ng 60% of which is owned by Company B) , and an opt ion
to obtain a 100% interest in a di fferent set of mining claims that constitute unproductive real property (the " Company A
Assets") . Company B owns certain mining claims and mining leases, as well as non-oper at ional processing faciliti es that
constitute fixtures to the min ing cla ims and mining leases (the "Company BAssets"). A ll of the abovementioned assets
are located in different counti es w ith in the same U.S. state.
Company A and Company Bare considering exchanging a ll rights, tit le, and interests in the respective Company A Assets
and Company B Assets pursuant to Section 1031 of the Internal Revenue Code. Aside from the reimbursement of certain
cash amounts att ributable to advances, the payment of certain contingent consideration in the event the Company B
Assets meet ce rtain production targets, and, if exercised, the costs of exercising the abovementioned opt ion, the parties
do not contemplate additional cash consideration as part of the exchange.
We note that the staff has considered the application of the HSR Act to Section 1031 exchanges in the past (for example,
with in Informal Interpr etat ion 0807011 ). In 0807011, we further note that the transfer of legal t it le, w ithout the
attendant transfer of beneficial ow nership, was not regarded as an acquisition of assets for purposes of the HSR Act.
In the potential transaction between Company A and Company B both legal title and beneficial owne r sh ip would be
transferred. However, in light of the pr ior guidance indicating that certain Section 1031 exchanges are not regarded as
asset acquisit ions for HSR Act purposes, we wanted to inquire as to whether a Section 1031 exchange of li ke-kind assets
where both beneficial ow nership and legal t it le are transferred would stil l be regarded as an asset acquisition fo r
purposes of the HSR Act. Many thanks in advance for your feedback.
Best regards,
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