Son of Boss Settlement Initiative FAQs
Section 1— Purpose and Scope of Initiative
Q-1.1. How is “substantially similar transactions” defined?
A-1.1. The term “substantially similar” includes any transaction that is expected to obtain the same or similar types of tax consequences and that is either factually similar or based on the same or similar tax strategy. Transactions that are the same as, or substantially similar to, the transaction described in Notice 2000-44 include the Son of Boss Loan Premium Transaction (described in Chief Counsel Notice 2003-030) and Son of Boss option transaction (described in Chief Counsel Notice 2003-020). Transactions using short sales, futures, derivatives, and any other type of offsetting obligations to inflate basis in a partnership interest would be the same as or substantially similar to the transaction described in Notice 2000-44. See §1.6011-4(c)(4) Example 1. The use of the inflated basis in the partnership interest to diminish gain that would otherwise be recognized on the transfer of a partnership asset would also be the same as or substantially similar to the transaction described in Notice 2000-44. See §1.6011-4(c)(4) Example 1.