Treatment if Prepetition RCF Facility Is Not Treated as a Security Sample Clauses

Treatment if Prepetition RCF Facility Is Not Treated as a Security. To the extent that a U.S. Holder’s Prepetition RCF Facility Claims or the New RCF Exit Facility are not treated as a security, such U.S. Holder would be treated as exchanging its Prepetition RCF Facility for a New RCF Exit Facility in a fully taxable exchange under section 1001 of the Tax Code. A U.S. Holder of a Prepetition RCF Facility who is subject to this treatment should recognize gain or loss equal to the difference between (i) the issue price of the New RCF Exit Facility (calculated as described under “—Issue Price”) in exchange for its Prepetition RCF Facility and (ii) the U.S. Holder’s adjusted tax basis in its Prepetition RCF Facility. The character of such gain or loss as capital gain or loss or as ordinary income or loss will be determined by a number of factors, including the tax status of the U.S. Holder, the nature of the Claim in such U.S. Holder’s hands, whether the Claim was purchased at a discount, and whether and to what extent the U.S. Holder previously has claimed a bad debt deduction with respect to its Claim. If recognized gain is capital gain, it generally would be long-term capital gain if the U.S. Holder held its Prepetition RCF Facility for more than one year at the time of the exchange. The deductibility of capital losses is subject to certain limitations, as discussed below. To the extent that a portion of the consideration received in exchange for its Prepetition RCF Facility is allocable to accrued but untaxed interest, the U.S. Holder may recognize ordinary income. A U.S. Xxxxxx’s tax basis in the New RCF Exit Facility should be equal to the issue price of the New RCF Exit Facility. A U.S. Xxxxxx’s holding period for the New RCF Exit Facility received on the Effective Date should begin on the day following the Effective Date.