If-
then the gain, if any, to the recipient shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property.
If an exchange is described in paragraph (1) but has the effect of the distribution of a dividend (determined with the application of section 318(a)), then there shall be treated as a dividend to each distributee such an amount of the gain recognized under paragraph (1) as is not in excess of his ratable share of the undistributed earnings and profits of the corporation accumulated after February 28, 1913. The remainder, if any, of the gain recognized under paragraph (1) shall be treated as gain from the exchange of property.
If-
then an amount equal to the sum of such money and the fair market value of such other property shall be treated as a distribution of property to which section 301 applies.
If-
then no loss from the exchange or distribution shall be recognized.
For purposes of this section-
Except as provided in paragraph (2), the term "other property" includes securities.
The term "other property" does not include securities to the extent that, under section 354 or 355, such securities would be permitted to be received without the recognition of gain.
If-
then, with respect to such securities received, the term "other property" means only the fair market value of such excess. For purposes of this subparagraph and subparagraph (C), if no securities are surrendered, the excess shall be the entire principal amount of the securities received.
If, in an exchange or distribution described in section 355, the principal amount of the securities in the controlled corporation which are received exceeds the principal amount of the securities in the distributing corporation which are surrendered, then, with respect to such securities received, the term "other property" means only the fair market value of such excess.
For purposes of this section-
Except as provided in paragraph (2), the term "other property" includes nonqualified preferred stock (as defined in section 351(g)(2)).
The term "other property" does not include nonqualified preferred stock (as so defined) to the extent that, under section 354 or 355, such preferred stock would be permitted to be received without the recognition of gain.
Notwithstanding any other provision of this section, to the extent that any of the other property (or money) is received in exchange for section 306 stock, an amount equal to the fair market value of such other property (or the amount of such money) shall be treated as a distribution of property to which section 301 applies.
For special rules for a transaction described in section 354, 355, or this section, but which-
26 U.S.C. § 356
EDITORIAL NOTES
AMENDMENTS1997-Subsecs. (e) to (g). Pub. L. 105-34 added subsec. (e) and redesignated former subsecs. (e) and (f) as (f) and (g), respectively.1990-Subsec. (d)(2)(B)(i). Pub. L. 101-508 struck out "or (d)" after "subsection (c)". 1982-Subsec. (a)(2). Pub. L. 97-248 inserted "(determined with the application of section 318(a))" after "distribution of a dividend".1976-Subsec. (d)(2)(B)(i). Pub. L. 94-253 substituted "subsection (c) or (d) thereof" for "subsection (c) thereof".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105-34 applicable, with certain exceptions, to transactions after June 8, 1997, see section 1014(f) of Pub. L. 105-34, set out as a note under section 351 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97-248, title II, §227(c)(2), Sept. 3, 1982, 96 Stat. 492, provided that: "The amendment made by subsection (b) [amending this section] shall apply to distributions after August 31, 1982, in taxable years ending after such date."
EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94-253 applicable to taxable years ending after Mar. 31, 1976, see section 2 of Pub. L. 94-253, set out as a note under section 354 of this title.
SAVINGS PROVISIONFor provisions that nothing in amendment by Pub. L. 101-508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note under section 45K of this title.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- stock
- The term "stock" includes shares in an association, joint-stock company, or insurance company.
- transaction
- The term "transaction" includes a series of transactions.