MIR » Topics » XIV . CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

This excerpt taken from the MIR 8-K filed Jan 19, 2005.

XIV.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

 

The following discussion is a summary of certain U.S. federal income tax consequences expected to result from the implementation of the Plan.  This discussion is based on the Internal Revenue Code of 1986, as amended (the “Tax Code”), as in effect on the date of this Disclosure Statement and on United States Treasury Regulations in effect (or in certain cases, proposed) on the date of this Disclosure Statement, as well as judicial and administrative interpretations thereof available on or before such date.  All of the foregoing are subject to change, which change could apply retroactively and could affect the tax consequences described below.  There can be no assurance that the Internal Revenue Service (the “IRS”) will not take a contrary view with respect to one or more of the issues discussed below, and no ruling from the IRS has been or will be sought with respect to any issues which may arise under the Plan.

 

The following summary is for general information only and does not purport to address all of the U.S. federal income tax consequences that may be applicable to any particular holder.  The tax treatment of a holder of an Allowed Claim or Equity Interest, as the case may be, may vary depending upon such holder’s particular situation.  The following discussion does not address state, local or foreign tax considerations that may be applicable to the Debtors and holders of an Allowed Claim or Equity Interest.  This summary does not address tax considerations applicable to holders that may be subject to special tax rules, such as financial institutions, insurance companies, real estate investment trusts, regulated investment companies, grantor trusts, dealers or traders in securities or currencies, tax-exempt entities, persons that hold an equity interest or a security in a Debtor as a position in a “straddle” or as part of a “hedging,”

 

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“conversion” or “integrated” transaction for U.S. federal income tax purposes, persons that have a “functional currency” other than the U.S. dollar, persons who acquired an equity interest or a security in a Debtor in connection with the performance of services, persons who are not United States persons (as defined in the Tax Code), and holders that own or will own (or are deemed to own) 10% or more (by voting power or value) of the stock of New Mirant.

 

In addition, for purposes of this discussion it is assumed that New Mirant is a U.S. corporation and this summary does not describe the tax consequences of New Mirant being a non-U.S. corporation.  The Debtors are considering the possibility of New Mirant being a non-U.S. corporation, which possibility would have significant tax consequences that are not described in this summary.

 

EACH HOLDER OF AN ALLOWED CLAIM OR EQUITY INTEREST IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE IMPLEMENTATION OF THE PLAN.

 

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