2004 Ruling 2004-0065921R3 - Conversion of corporations into LLCs -- summary under Disposition

Conversions of corporations incorporated under the laws of Delaware and California into limited liability corporations (so that they can be held as indirect subsidiaries of a U.S. REIT in an "UPREIT" structure) would not result in dispositions at the shareholder or the entity level, given that the conversions would be similar to corporate continuances in Canada (i.e., the California corporate law provides that "the conversion shall not constitute a dissolution of such corporation and shall constitute a continuation of the existence of the converting corporation in the form of the applicable other entity of that State," and similarly for Delaware.