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26 U.S.C. § 331 — Gain or loss to shareholder in corporate liquidations
Federal law — U.S. Code and appendices · legal_authorities
**(a) Distributions in complete liquidation treated as exchanges** Amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated as in full payment in exchange for the stock.
**(b) Nonapplication of section 301** Section 301 (relating to effects on shareholder of distributions of property) shall not apply to any distribution of property (other than a distribution referred to in paragraph (2)(B) of section 316(b)) in complete liquidation.
**(c) Cross reference** For general rule for determination of the amount of gain or loss recognized, see section 1001.
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Source file: Laws/federal/codes/united-states-code/title-26/section-331-gain-or-loss-to-shareholder-in-corporate-liquidations--3ed38e5923.md
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Source location: Title 26, Chapter 1, § 331; chapter-001-normal-taxes-and-surtaxes.md
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**(a) Distributions in complete liquidation treated as exchanges** Amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated as in full payment in exchange for the stock.
**(b) Nonapplication of section 301** Section 301 (relating to effects on shareholder of distributions of property) shall not apply to any distribution of property (other than a distribution referred to in paragraph (2)(B) of section 316(b)) in complete liquidation.
**(c) Cross reference** For general rule for determination of the amount of gain or loss recognized, see section 1001.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** No gain or loss shall be recognized on the receipt by a corporation of property distributed in complete liquidation of another corporation.
**(b) Liquidations to which section applies** For purposes of this section, a distribution shall be considered to be in complete liquidation only if—
(1) the corporation receiving such property was, on the date of the adoption of the plan of liquidation, and has continued to be at all times until the receipt of the property, the owner of stock (in such other corporation) meeting the requirements of section 1504(a)(2); and either
(2) the distribution is by such other corporation in complete cancellation or redemption of all its stock, and the transfer of all the property occurs within the taxable year; in such case the adoption by the shareholders of the resolution under which is authorized the distribution of all the assets of such corporation in complete cancellation or redemption of all its stock shall be considered an adoption of a plan of liquidation, even though no time for the completion of the transfer of the property is specified in such resolution; or
(3) such distribution is one of a series of distributions by such other corporation in complete cancellation or redemption of all its stock in accordance with a plan of liquidation under which the transfer of all the property under the liquidation is to be completed within 3 years from the close of the taxable year during which is made the first of the series of distributions under the plan, except that if such transfer is not completed within such period, or if the taxpayer does not continue qualified under paragraph (1) until the completion of such transfer, no distribution under the plan shall be considered a distribution in complete liquidation.
If
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 332
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** If a corporation redeems its stock (within the meaning of section 317(b)), and if paragraph (1), (2), (3), (4), or (5) of subsection (b) applies, such redemption shall be treated as a distribution in part or full payment in exchange for the stock.
**(b) Redemptions treated as exchanges**
(1) **Redemptions not equivalent to dividends** — Subsection (a) shall apply if the redemption is not essentially equivalent to a dividend.
(2) **Substantially disproportionate redemption of stock**
(A) *In general* — Subsection (a) shall apply if the distribution is substantially disproportionate with respect to the shareholder.
(B) *Limitation* — This paragraph shall not apply unless immediately after the redemption the shareholder owns less than 50 percent of the total combined voting power of all classes of stock entitled to vote.
(C) *Definitions* — For purposes of this paragraph, the distribution is substantially disproportionate if—
(i) the ratio which the voting stock of the corporation owned by the shareholder immediately after the redemption bears to all of the voting stock of the corporation at such time,
is less than 80 percent of—
(ii) the ratio which the voting stock of the corporation owned by the shareholder immediately before the redemption bears to all of the voting stock of the corporation at such time.
For purposes of this paragraph, no distribution shall be treated as substantially disproportionate unless the shareholder’s ownership of the common stock of the corporation (whether voting or nonvoting) after and before redemption also meets the 80 percent requirement of the preceding sentence. For purposes of the preceding sentence, if there is more than one class of common stock, the determinations shall be made by r
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definition of surviving spouse**
(1) **In general** — For purposes of section 1, the term “surviving spouse” means a taxpayer—
(A) whose spouse died during either of his two taxable years immediately preceding the taxable year, and
(B) who maintains as his home a household which constitutes for the taxable year the principal place of abode (as a member of such household) of a dependent (i) who (within the meaning of section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) is a son, stepson, daughter, or stepdaughter of the taxpayer, and (ii) with respect to whom the taxpayer is entitled to a deduction for the taxable year under section 151.
(2) **Limitations** — Notwithstanding paragraph (1), for purposes of section 1 a taxpayer shall not be considered to be a surviving spouse—
(A) if the taxpayer has remarried at any time before the close of the taxable year, or
(B) unless, for the taxpayer’s taxable year during which his spouse died, a joint return could have been made under the provisions of section 6013 (without regard to subsection (a)(3) thereof).
(3) **Special rule where deceased spouse was in missing status** — If an individual was in a missing status (within the meaning of section 6013(f)(3)) as a result of service in a combat zone (as determined for purposes of section 112) and if such individual remains in such status until the date referred to in subparagraph (A) or (B), then, for purposes of paragraph (1)(A), the date on which such individual died shall be treated as the earlier of the date determined under subparagraph (A) or the date determined under subparagraph (B):
(A) the date on which the determination is made under [section 556 of title 37](https://uscode.house.gov/view.xhtml?req=granuleid:
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** For purposes of this subtitle, the term “dividend” means any distribution of property made by a corporation to its shareholders—
(1) out of its earnings and profits accumulated after February 28, 1913, or
(2) out of its earnings and profits of the taxable year (computed as of the close of the taxable year without diminution by reason of any distributions made during the taxable year), without regard to the amount of the earnings and profits at the time the distribution was made.
Except as otherwise provided in this subtitle, every distribution is made out of earnings and profits to the extent thereof, and from the most recently accumulated earnings and profits. To the extent that any distribution is, under any provision of this subchapter, treated as a distribution of property to which section 301 applies, such distribution shall be treated as a distribution of property for purposes of this subsection.
**(b) Special rules**
(1) **Certain insurance company dividends** — The definition in subsection (a) shall not apply to the term “dividend” as used in subchapter L in any case where the reference is to dividends of insurance companies paid to policyholders as such.
(2) **Distributions by personal holding companies**
(A) In the case of a corporation which—
(i) under the law applicable to the taxable year in which the distribution is made, is a personal holding company (as defined in section 542), or
(ii) for the taxable year in respect of which the distribution is made under section 563(b) (relating to dividends paid after the close of the taxable year), or section 547 (relating to deficiency dividends), or the corresponding provisions of prior law, is a personal holding company under the law applicable to such taxable year,
the t
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Federal law — U.S. Code and appendices · legal_authorities
Page 1103
TITLE 26—INTERNAL REVENUE CODE
§ 332
Editorial Notes
AMENDMENTS
1986—Pub. L. 99–514, title VI, § 631(e)(16), Oct. 22, 1986,
100 Stat. 2275, struck out item 333 ‘‘Election as to rec-
ognition of gain in certain liquidations’’.
§ 331. Gain or loss to shareholder in corporate
liquidations
(a) Distributions in complete liquidation treated
as exchanges
Amounts received by a shareholder in a dis-
tribution in complete liquidation of a corpora-
tion shall be treated as in full payment in ex-
change for the stock.
(b) Nonapplication of section 301
Section 301 (relating to effects on shareholder
of distributions of property) shall not apply to
any distribution of property (other than a dis-
tribution referred to in paragraph (2)(B) of sec-
tion 316(b)) in complete liquidation.
(c) Cross reference
For general rule for determination of the amount
of gain or loss recognized, see section 1001.
(Aug. 16, 1954, ch. 736, 68A Stat. 101; Pub. L.
88–272, title II, § 225(f)(2), Feb. 26, 1964, 78 Stat. 88;
Pub. L. 94–455, title XIX, § 1901(b)(28)(A), Oct. 4,
1976, 90 Stat. 1799; Pub. L. 97–248, title II, § 222(a),
(e)(1)(B), Sept. 3, 1982, 96 Stat. 478, 480; Pub. L.
115–141, div. U, title IV, § 401(a)(63), Mar. 23, 2018,
132 Stat. 1187.)
Editorial Notes
AMENDMENTS
2018—Pub. L. 115–141 substituted ‘‘shareholder’’ for
‘‘shareholders’’ in section catchline.
1982—Subsec. (a). Pub. L. 97–248, § 222(a), substituted
provisions that amounts received by a shareholder in a
distribution in complete liquidation of a corporation
shall be treated as in full payment in exchange for the
stock for provisions that, in complete liquidations,
amounts distributed shall be treated as in full payment
in exchange for the stock, while amounts distributed in
partial liquidat
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