From: jeffrey E. <[email protected]> Sent: Wednesday, February 24, 2016 12:04 PM To: Halperin, Alan S Subject: Re: Re: if i owe you money and now i owe joe shmoe because he boug=t your note. i dont see any gain rec On Wed, Feb 24, 2016 at 12:56 PM, Halpe=in, Alan target=> wrote: I suspect that UBTI would be calculat=d based on some reasonable approach. Perhaps one would take a fraction of =he taxable income for the year. The numerator would be the number of days held by the charity and the denominator would =e 365. But we would need to investigate further. Under current TRA, Tufts gain gives r=se to TRA rights only if the gain is triggered in connection with an excha=ge. Here, the Tufts gain would be triggered by the contribution to the DAF. Accordingly, under the current TRA, the resul=ing gain caused by the contribution would not give rise to any TRA payment= I don't know about the =9Ctransfer" of the loan to another company. I suspect that a=y such assumption by another party would give rise to gain at that time. I have copied Rick to get his reactio=. Alan Alan S. Halperin I Partner Paul Weiss Rifkind Wharton & Garrison LLP I New York, NY 10019-6064 (Direct Phone) I Fax www.paulweiss.com <http://www.paulweiss.com> From: jeffrey E. [mailto:[email protected] Sent: Wednesday, February 24, 2016 6:46 AM (Direct EFTA_R1_01579559 EFTA02469237

To: Halperin, Alan S Subject: Re: Re: thanks re ubti, so that if the charity c=nverted the units and sold the next day after receipt, how would it be cal=ulated . approx what amount if done next week for ex. - 2 how does =ufts gain impact TRA. not clear to me. re tufts gain, if the " loan " from agm was transferred to another =o but kept the loan outstanding and that co was owned by family members fo= ex. wouldnt it keep the gain outstanding? On Wed, Feb 24, 2016 at 12:39 PM, Halperin, Alan S & > wrote: Is the tufts gain a per unit calculation? I suspect that the answer is yes. The =E2 Tufts gain" results from a constructive distribution that =s attributable to a reduction in share of liabilities, The share of =iabilities is proportional (based on units), so a reduction in share of liabilities that results from disposing of a number of units shou=d be proportional to the number of units disposed of.=/u> If the debt is are guaranteed, does the contributio= still trigger gain? The purpose of the guarantee would be to avoid=a reduction in share of liabilities, so if it were done, it would presumab=y avoid triggering any Tufts gain. Remember that the guarantee is a =iable strategy to defer gain only if all three founders participate in the guarantee and that the guarantee involve= some economic risk. What is the tax on ubti? For example if they =onated this week and the charity promptly sold the shares, is the UBTI limited to income during the time it was held? The UBTI on which the charity owes tax is limi=ed to the income during the period that the charity owns the AOG units (an= until the charity completes the exchange with the public company). =ote that the donor advised fund may not accept property which generates UBTI. </=> Alan S. Halperin I Partner Paul, Weiss, Rifkind, Wharton & Garrison LIP I New York, NY 10019-6064 (=irect Phone) I (=irect Fax) www.paulweiss.com <http:/ www.paulweiss.com> 2 EFTA_R1_01579560 EFTA02469238