26 U.S.C. § 346 — Definition and special rule

submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 120 words · no verdicts yet

in plain englishAI-generated · not legal advice

A distribution counts as a complete liquidation if it is one of a series redeeming all a corporation's stock. This must happen under a formal liquidation plan. The Secretary must write rules stopping people from using other tax provisions to fake a partial liquidation.

(a) For purposes of this subchapter, a distribution counts as part of a complete liquidation if it is one of a series of distributions that, together, redeem all of a corporation's stock, carried out under a formal plan. (b) Congress repealed the special tax treatment for partial liquidations in section 222(a) and (b) of the Tax Equity and Fiscal Responsibility Act of 1982. The Secretary must write regulations making sure people cannot get around that repeal by using section 355, section 351, any other law, or any regulation — including the consolidated return regulations — to reach the same result as an old-style partial liquidation.

the actual law source: uscode.house.gov ↗public domain

(a) Complete liquidation

For purposes of this subchapter, a distribution shall be treated as in complete liquidation of a corporation if the distribution is one of a series of distributions in redemption of all of the stock of the corporation pursuant to a plan.

(b) Transactions which might reach same result as partial liquidations

The Secretary shall prescribe such regulations as may be necessary to ensure that the purposes of subsections (a) and (b) of section 222 of the Tax Equity and Fiscal Responsibility Act of 1982 (which repeal the special tax treatment for partial liquidations) may not be circumvented through the use of section 355, 351, or any other provision of law or regulations (including the consolidated return regulations).

Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 110; Pub. L. 97–248, title II, § 222(d), Sept. 3, 1982, 96 Stat. 479; Pub. L. 99–514, title VI, § 631(e)(7), Oct. 22, 1986, 100 Stat. 2273.)

history & why it existsrecord from the source credit

1954Enacted · Act of Aug. 16, 1954, ch. 736
1982Amended · Pub. L. 97-248 · 96 Stat. 479
1986Amended · Pub. L. 99-514 · 100 Stat. 2273

A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.

all 0 arguments · sorted by: best

no arguments yet — make the first case