Time-Shares A Wasting – Starwood’s Vistana Spinoff, Reverse Morris Trust Merger with Interval Slightly Delayed

Generally, any gain or loss realized by a non-U.S. holder on an exchange of a “U.S. real property interest” under the Code (pursuant to provisions commonly known as “FIRPTA”) should be recognized and subject to current U.S. federal income tax as income that is effectively connected with the conduct of a U.S. trade or business of such non-U.S. holder (“FIRPTA tax”).  For this purpose, a non-U.S. holder is a nonresident alien individual or a corporation, partnership, estate or trust that is not a U.S. holder.  An exception to this rule provides generally that if a U.S. real property interest is exchanged for another U.S. real property interest in a transaction otherwise qualifying for tax-free treatment under the Code, then the FIRPTA tax will not apply.

 Since the Vistana Common Stock  received by Starwood common stockholders and Partnership Holders in the Spin-Off is expected to constitute a U.S. real property interest under these rules but the Company common stock received in exchange therefor is generally not expected to constitute a U.S. real property interest, any gain realized by a non-U.S. holder on the disposition of the Vistana Common Stock in the Merger generally should be subject to FIRPTA tax even if the Spin-Off and Merger qualify as reorganizations under the Code.  As a result, the non-U.S. holder generally should be required to file a U.S. federal income tax return with the Internal Revenue Service (the “IRS”) to report such income (or include such income on the U.S. federal income tax return the non-U.S. holder may otherwise be required to file with the IRS).  A withholding tax equal to 15% of the amount realized on the disposition of the Vistana Common Stock (i.e., the fair market value of the Company common stock received by a holder in the Merger, including the fair market value of any fractional share of Company common stock deemed to be received) generally will also be required (the “FIRPTA withholding tax”).  A U.S. holder may eliminate the FIRPTA withholding tax in respect of its receipt of Company common stock in the Merger by certifying in writing (under penalties of perjury) to the person required to make the FIRPTA withholding that such holder is not a non-U.S. holder, and providing its U.S. taxpayer identification number (social security number for individuals and U.S. employer identification number in all other cases), address and certain other information, or by providing such other information, as is satisfactory to the person required to make the FIRPTA withholding, to establish such holder’s status as a U.S. holder.  A non-U.S. holder generally should expect the FIRPTA withholding tax to be made in respect of its receipt of Company common stock in the Merger unless such non-U.S. holder qualifies for an exemption and provides appropriate certification to the person required to withhold.  If the FIRPTA withholding tax made in respect of Company common stock exceeds the holder’s U.S. federal income tax liability with respect thereto, a holder may be entitled to a refund or credit against such holder’s U.S. federal income tax liability, provided that certain required information is timely provided to the IRS.  Starwood common stockholders and Partnership Holders should consult their tax advisors concerning the application of FIRPTA and the FIRPTA withholding tax to the receipt of Company common stock in the Merger.