The IRS has ruled (PLR 2015-05-006) that the parent of a consolidated group had three classes of stock outstanding: common stock that was wholly owned by a foreign holding company and two classes of publicly traded preferred stock.
The private letter ruling addressed a parent company whose foreign holding company would have held at least 80% of the vote and 80% of the value of the domestic parent if the series A preferred stock qualified as Section 1504(a)(4) stock ("plain vanilla" preferred stock).
On a subsequent date, the foreign holding company domesticated into the United States and became a domestic holding company in what was represented to be a qualifying Section 368(a)(1)(F) reorganization. The domestic holding company then merged downstream with and into the parent, with the parent surviving.
The IRS ruled that the series A preferred stock qualified as Section 1504(a)(4) stock and the parent's consolidated group did not terminate when the foreign holding company became a domestic company.
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