Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 78-44

1978-1 C.B. 216

Sec. 851

IRS Headnote

Regulated investment company; change of state of incorporation. A regulated investment company that changed the state in which it was incorporated, accomplished by a reorganization under section 368(a)(1)(F) of the Code, and adopted and reaffirmed the registration statements previously filed with the SEC will be considered as a regulated investment company for the entire taxable year of the change for purposes of section 851(a)(1).

Full Text

Rev. Rul. 78-44

The taxpayer was a regulated investment company incorporated in state X. The taxpayer has been registered under the Investment Company Act of 1940 (Act) since 1968. In 1976, the taxpayer decided to change its place of incorporation to state Y in order to avoid the newly enacted franchise tax in state X. Subsequent to this change, which was accomplished by a reorganization described in section 368(a)(1)(F) of the Internal Revenue Code of 1954, the taxpayer adopted and reaffirmed the registration statements required by the Act that the taxpayer previously filed with the SEC while it was incorporated in state X. In addition, the Securities and Exchange Commission issued an opinion letter to the taxpayer that it will continue to treat the taxpayer as a properly registered management company under the Act because the taxpayer reaffirmed its registration statements.

Held, for purposes of section 851(a)(1) of the Code, which defines a regulated investment company, the taxpayer is considered to be registered under the Act as a management company at all times during the taxable year when it adopts and reaffirms its registration statements required by the Act and thus continues to be a regulated investment company.