Favorable private-letter rulings that the Internal Revenue Service has started to issue under section 351 of the Internal Revenue Code of 1986 will eliminate tax and accounting problems that have caused a slowdown in mutual holding company transactions this year.

The resolution of this issue will result in a restoration to the capital of institutions that have completed mutual holding company transactions of deferred tax liabilities that had been established to reflect the possible cost if the tax issue had been resolved against them by the IRS.

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