From: Jeffrey Epstein <[email protected]> To: "Fenn, Patrick" Subject: Re: trying to insure step up if not elimiation, Date: Mon, 27 May 2013 01:12:16 +0000 understood, lets first come up with the tax solution , that will guide us toward tweaking it so it meets all needs.. I appreciate you thinking about it on your holiday. On Sun, May 26, 2013 at 7:44 PM, Fenn, Patrick Hi Jeffrey. > wrote: The negative basis is in AMH (through AP Prof and BRH). A basis step up in AMH for the boys' contributed cash would require the cash to find its way to AMH. Lending that cash to AMH could provide more debt basis (assuming existing debt remains outstanding) but that would raise non-tax issues that would have to be vetted). Providing the cash as equity to AMH, which could be used to repay the existing loan, may be a better alternative, maybe in the form of a preferred that could be held in the manner you have suggested in the freeze partnership. Same non-tax vetting would be required. From: Jeffrey Epstein [rnallto:je gmail nom Sent: Tuesday, May 21, 2013 07:34 AM To: Fenn, Patrick Subject: trying to insure step up If not elimiation, Liabilities with the boys. The basis step up uncertainty can be avoided by some structuring if a freeze partnership is created to keep the liabilities with the boys , by treating the entity as a partnership for income tax purposes, rather than a disregarded entity. To accomplish this, we would create a nondisregarded entity to be the initial partner, who will acquire the junior equity interest. i.e. an LLC t. It's important to note that the low basis leveraged property would be contributed in exchange for the senior preferred ownership interest. Different property, presumably unencumbered property or cash, should be contributed to the nondisregarded entity formed to hold the junior equity interest. The nondisregarded entity would, in turn, contribute this property to the partnership in exchange for the junior equity i