26 U.S.C. § 333 — Untitled legal text

Page 1105 TITLE 26—INTERNAL REVENUE CODE § 334 and any sale or exchange, made by a corporation after July 31, 1986, unless such corporation is completely liq- uidated before Jan. 1, 1987, any transaction described in section 338 of this title for which the acquisition date occurs after Dec. 31, 1986, and any distribution, not in complete liquidation, made after Dec. 31, 1986, with ex- ceptions and special and transitional rules, see section 633 of Pub. L. 99–514, set out as an Effective Date note under section 336 of this title. Pub. L. 99–514, title XVIII, § 1804(e)(6)(B), Oct. 22, 1986, 100 Stat. 2803, provided that: ‘‘(i) IN GENERAL.—Except as provided in clause (iii), the amendment made by subparagraph (A) [amending this section] shall apply with respect to plans of com- plete liquidation adopted after March 28, 1985. ‘‘(ii) CERTAIN DISTRIBUTIONS MADE AFTER DECEMBER 31, 1984.—Except as provided in clause (iii), the amendment made by subparagraph (A) shall also apply with respect to plans of complete liquidations adopted on or before March 28, 1985, pursuant to which any distribution is made in a taxable year beginning after December 31, 1984 (December 31, 1983, in the case of an affiliated group to which an election under section 60(b)(7) of the Tax Reform Act of 1984 [Pub. L. 98–369, set out as a note under section 1504 of this title] applies), but only if the liquidating corporation and any corporation which re- ceives a distribution in complete liquidation of such corporation are members of an affiliated group of cor- porations filing a consolidated return for the taxable year which includes the date of the distribution. ‘‘(iii) TRANSITIONAL RULE FOR AFFILIATED GROUPS.— The amendment made by subparagraph (A) shall not apply with respect to plans of complete liquidation if the liquidating corporation is a member of an affiliated group of corporations under section 60(b) (2), (5), (6), or (8) of the Tax Reform Act of 1984 [Pub. L. 98–369, set out as a note under section 1504 of this title], for all taxable years which include the date of any distribution pursu- ant to such plan.’’ SAVINGS PROVISION For provisions that nothing in amendment by Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining li- ability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115–141, set out as a note under section 23 of this title. PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. [§ 333. Repealed. Pub. L. 99–514, title VI, § 631(e)(3), Oct. 22, 1986, 100 Stat. 2273] Section, acts Aug. 16, 1954, ch. 736, 68A Stat. 103; Feb. 26, 1964, Pub. L. 88–272, title II, § 225(g), 78 Stat. 89; Oct. 4, 1976, Pub. L. 94–455, title XIX, §§ 1901(a)(44), 1906(b)(13)(A), 1951(b)(6)(A), 90 Stat. 1772, 1834, 1838, re- lated to election as to recognition of gain in certain liquidations. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable to any distribution in complete liq- uidation, and any sale or exchange, made by a corpora- tion after July 31, 1986, unless such corporation is com- pletely liquidated before Jan. 1, 1987, any transaction described in section 338 of this title for which the ac- quisition date occurs after Dec. 31, 1986, and any dis- tribution, not in complete liquidation, made after Dec. 31, 1986, with exceptions and special and transitional rules, see section 633 of Pub. L. 99–514, set out as an Ef- fective Date note under section 336 of this title. § 334. Basis of property received in liquidations (a) General rule If property is received in a distribution in complete liquidation, and if gain or loss is rec- ognized on receipt of such property, then the basis of the property in the hands of the dis- tributee shall be the fair market value of such property at the time of the distribution. (b) Liquidation of subsidiary (1) In general If property is received by a corporate dis- tributee in a distribution in a complete liq- uidation to which section 332 applies (or in a transfer described in section 337(b)(1)), the basis of such property in the hands of such dis- tributee shall be the same as it would be in the hands of the transferor; except that, in the hands of such distributee— (A) the basis of such property shall be the fair market value of the property at the time of the distribution in any case in which gain or loss is recognized by the liquidating corporation with respect to such property, and (B) the basis of any property described in section 362(e)(1)(B) shall be the fair market value of the property at the time of the dis- tribution in any case in which such distributee’s aggregate adjusted basis of such property would (but for this subpara- graph) exceed the fair market value of such property immediately after such liquidation. (2) Corporate distributee For purposes of this subsection, the term ‘‘corporate distributee’’ means only the cor- poration which meets the stock ownership re- quirements specified in section 332(b). (Aug. 16, 1954, ch. 736, 68A Stat. 104; Pub. L. 89–809, title II, § 202(a), (b), Nov. 13, 1966, 80 Stat. 1576; Pub. L. 94–455, title XIX, §§ 1901(a)(45), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1772, 1834; Pub. L. 97–248, title II, §§ 222(e)(1)(C), 224(b), Sept. 3, 1982, 96 Stat. 480, 488; Pub. L. 99–514, title VI, § 631(e)(4), Oct. 22, 1986, 100 Stat. 2273; Pub. L. 100–647, title I, § 1006(e)(6), Nov. 10, 1988, 102 Stat. 3401; Pub. L. 105–277, div. J, title III, § 3001(b)(2), Oct. 21, 1998, 112 Stat. 2681–904; Pub. L. 108–357, title VIII, § 836(b), Oct. 22, 2004, 118 Stat. 1595; Pub. L. 109–135, title IV, § 403(dd)(1), Dec. 21, 2005, 119 Stat. 2630.) Editorial Notes AMENDMENTS 2005—Subsec. (b)(1). Pub. L. 109–135 substituted ‘‘ex- cept that, in the hands of such distributee—’’ for ‘‘ex- cept that the basis of such property in the hands of such distributee shall be the fair market value of the property at the time of the distribution—’’ in introduc- tory provisions, added subpars. (A) and (B), and struck out former subpars. (A) and (B) which read as follows: ‘‘(A) in any case in which gain or loss is recognized by the liquidating corporation with respect to such property, or