410(b)-6(C) transition period - does it apply?

[Belgarath]

I think it clearly does not apply in the following situation, but I thought I'd solicit opinions in case I'm being overly conservative.

LLC A is owned by 3 people - 1/3 each. LLC B is formed, owned 100% by LLC A. So there's a controlled group, or common control group depending upon tax structure. Doesn't matter for purposes of this question.

I believe the transition period does not apply - it isn't any sort of a merger or acquisition under either the code or regs. as far as I'm concerned.

Any other thoughts?

[PensionPro]

eob agrees ...

The transition relief granted by IRC 410(b)(6)(C ) appears to contemplate some form of acquisition from an unrelated entity. The formation of a new subsidiary by a company, as part of a business restructuring, or acquisition involving entities that are already part of a related group, are probably not covered by the transition rule.