EX-99.12.a
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EX-99.12.a
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Xxxxxxxx Xxxxx Xxxxxxx & Xxxxx, LLP
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0000 Xxxxxx Xxxxxx, Xxxxx 0000
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Philadelphia, PA 19103
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Telephone: 000-000-0000
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Fax: 000-000-0000
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xxx.xxxxxxxx.xxx
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October 15, 2021
Board of Directors, Dimensional Investment Group Inc.
0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx
Austin, Texas 78746
Board of Directors, DFA Investment Dimensions Group Inc.
0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx
Austin, Texas 78746
| Re: |
Agreement and Plan of Reorganization (“Agreement”) adopted as of the October 15, 2021 by and between Dimensional Investment Group Inc., a corporation organized under the laws of the State of
Maryland (“Acquiring Corporation”), on behalf of one of its portfolios, the Tax-Managed U.S. Marketwide Value Portfolio II (“Acquiring Portfolio”), and DFA Investment Dimensions Group Inc., a corporation organized under the laws of the State of
Maryland (“Target Corporation”), on behalf of one of its portfolios, the Tax-Managed U.S. Marketwide Value Portfolio (“Target Portfolio”)
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Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax consequences of the Reorganization of the Target Portfolio, which will consist of: (i) the acquisition by Acquiring Corporation, on behalf of
Acquiring Portfolio, of substantially all of the property, assets, and goodwill of Target Portfolio in exchange solely for full and fractional shares of capital stock, with a par value of one cent ($0.01) per share, of Acquiring Portfolio (“Acquiring
Portfolio Shares”); (ii) the distribution of Acquiring Portfolio Shares to the holders of shares of capital stock of Target Portfolio (“Target Portfolio Shares”) according to their respective interests in Target Portfolio, in complete liquidation of
Target Portfolio; and (iii) the dissolution of Target Portfolio as soon as is practicable after the Closing, all upon and subject to the terms and conditions of the Agreement (the “Reorganization”). Capitalized terms not otherwise defined herein shall
have the meanings assigned to them in the Agreement.
In rendering our opinion, we have reviewed and relied upon: (a) a copy of the executed
Board of Directors, Dimensional Investment Group Inc.
Board of Directors, DFA Investment Dimensions Group Inc.
October 15, 2021
Page 2
For purposes of this opinion, we have assumed that the Target Portfolio on the Closing Date of the Reorganization satisfies, and immediately following the Closing Date of the Reorganization, the Acquiring
Portfolio will continue to satisfy, the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for qualification as regulated investment companies.
Based on the foregoing, and provided the Reorganization is carried out in accordance with the applicable laws of the State of Maryland, the terms of the Agreement and the statements in the Representation
Letter for the Target Portfolio and the Acquiring Portfolio, it is our opinion that for federal income tax purposes:
1. The
acquisition by the Acquiring Portfolio of substantially all of the Assets of the Target Portfolio in exchange for the Acquiring Portfolio Shares followed by the distribution by the Target Portfolio to its shareholders of the Acquiring Portfolio
Shares in complete liquidation of the Target Portfolio, will qualify as a reorganization within the meaning of Section 368(a)(1)(C) of the Code, and the Target Portfolio and Acquiring Portfolio each will be a “party to the reorganization” within the
meaning of Section 368(b) of the Code.
2. No gain or
loss will be recognized by the Target Portfolio upon the transfer of substantially all of its Assets to the Acquiring Portfolio in exchange solely for the Acquiring Portfolio Shares pursuant to Sections 361(a) and 357(a) of the Code.
3. No gain or
loss will be recognized by the Acquiring Portfolio upon the receipt by it of substantially all of the Assets of the Target Portfolio in exchange solely for the Acquiring Portfolio Shares pursuant to Section 1032(a) of the Code.
4. No gain or
loss will be recognized by the Target Portfolio upon the distribution of the Acquiring Portfolio Shares to its shareholders in complete liquidation of the Target Portfolio pursuant to Section 361(c)(1) of the Code.
5. The tax basis
of the Assets of the Target Portfolio received by the Acquiring Portfolio will be the same as the tax basis of the Assets to the Target Portfolio immediately prior to the exchange pursuant to Section 362(b) of the Code.
Board of Directors, Dimensional Investment Group Inc.
Board of Directors, DFA Investment Dimensions Group Inc.
October 15, 2021
Page 3
6. The holding
periods of the Assets of the Target Portfolio received by the Acquiring Portfolio will include the periods during which such Assets were held by the Target Portfolio pursuant to Section 1223(2) of the Code.
7. No gain or
loss will be recognized by the shareholders of the Target Portfolio upon the exchange of their Target Portfolio Shares for the Acquiring Portfolio Shares (including fractional shares to which they may be entitled), pursuant to Section 354(a) of the
Code.
8. The aggregate
tax basis of the Acquiring Portfolio Shares received by shareholders of the Target Portfolio (including fractional shares to which they may be entitled) will be the same as the aggregate tax basis of the Target Portfolio Shares exchanged therefor
pursuant to Section 358(a)(1) of the Code.
9. The holding
period of the Acquiring Portfolio Shares received by a shareholder of the Target Portfolio (including fractional shares to which they may be entitled) will include the holding period of the Target Portfolio Shares exchanged therefor, provided that
the shareholder held such Target Portfolio as a capital asset on the date of the Reorganization pursuant to Section 1223(1) of the Code.
10. For purposes
of Section 381 of the Code, the Acquiring Portfolio will succeed to and take into account, as of the date of the transfer as defined in Section 1.381(b)-1(b) of the regulations issued by the United States Department of the Treasury (the “Income Tax
Regulations”), the items of the Target Portfolio described in Section 381(c) of the Code as if there had been no Reorganization, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code, if applicable, and the
Income Tax Regulations promulgated thereunder.
Notwithstanding anything to the contrary herein, we express no opinion as to the effect of the Reorganization on the Target Portfolio, the Acquiring Portfolio or any Target Portfolio shareholders with
respect to any asset as to which any gain or loss is required to be recognized for federal income tax purposes regardless of whether such transfer would otherwise be a nonrecognition transaction under the Code.
Our opinion is based upon the Code, the applicable Income Tax Regulations, the present positions of the Internal Revenue Service (the “Service”) as are set forth in published revenue rulings and revenue
procedures, present administrative positions of the Service, and existing judicial decisions, all of which are subject to change either prospectively or retroactively. We do not undertake to make any continuing analysis of the facts or relevant law
following the date of the Reorganization.
Board of Directors, Dimensional Investment Group Inc.
Board of Directors, DFA Investment Dimensions Group Inc.
October 15, 2021
Page 4
Our opinion is conditioned upon the performance by the Acquiring Corporation, on behalf of the Acquiring Portfolio, and the Target Corporation, on behalf of the Target Portfolio, of the undertakings in the
Agreement and the Representation Letter. Except as expressly set forth above, we express no other opinion to any party as to the tax consequences, whether federal, state, local or foreign, with respect to (i) the Reorganization or any transaction
related to or contemplated by such Reorganization (or incident thereto) or (ii) the effect, if any, of the Reorganization on any other transaction and/or the effect, if any, of any such other transaction on the Reorganization.
We hereby consent to the use of this opinion as an exhibit to the registration statement of the Acquiring Portfolio on Form N-14, and any amendments thereto, covering the registration of the Acquiring
Portfolio Shares under the Securities Act of 1933, as amended, to be issued in the Reorganization.
Very truly yours,
/s/ XXXXXXXX XXXXX XXXXXXX & XXXXX, LLP
XXXXXXXX XXXXX XXXXXXX & XXXXX, LLP
