Page:United States Statutes at Large Volume 100 Part 3.djvu/466

 100 STAT. 2274

PUBLIC LAW 99-514—OCT. 22, 1986

pm. (8)(A) Subparagraphs (A) and (B) of section 453(h)(1) (relating ) to use of installment sales in section 337 liquidations) are amended to read as follows: i n •'• "(A) IN GENERAL.—If, in a liquidation to which section 331 j< applies, the shareholder receives (in exchange for the shareholder's stock) an installment obligation acquired in respect of a sale or exchange by the corporation during the 12; t vr month period beginning on the date a plan of complete liquidation is adopted and the liquidation is completed during such 12-month period, then, for purposes of this -ij section, the receipt of payments under such obligation (but not the receipt of such obligation) by the shareholder shall be treated as the receipt of payment for the stock. "(B)

OBLIGATIONS ATTRIBUTABLE TO SALE OF INVENTORY MUST RESULT FROM BULK SALE.—Subparagraph (A) shall not

apply to an installment obligation acquired in respect of a sale or exchange of— "(i) stock in trade of the corporation, g "(ii) other property of a kind which would properly be 31 ii ^f. included in the inventory of the corporation if on hand at the close of the taxable year, and as^imB V "(iii) property held by the corporation primarily for "^cj. V a sale to customers in the ordinary course of its trade or business, c^ixi unless such sale or exchange is to one person and involves substantially all of such property attributable to a trade or business of the corporation." (B) Subparagraph (E) of section 453(h)(1) is amended to read as follows: "(E) SALES BY LIQUIDATING SUBSIDIARIES.—For purposes of


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subparagraph (A), in the case of a controlling corporate shareholder (within the meaning of section 368(c)(1)) of a selling corporation, an obligation acquired in respect of a i^ sale or exchange by the selling corporation shall be treated as so acquired by such controlling corporate shareholder. The preceding sentence shall be applied successively to each controlling corporate shareholder above such controlling corporate shareholder." io t ^C)) The heading for section 453(h) is amended by striking out rj; "SECTION 337" and inserting in lieu thereof "CERTAIN". (9) Subsection (d) of section 453B is amended to read as follows: "(d) EFFECT OF DISTRIBUTION IN LIQUIDATIONS TO WHICH SECTION 332 APPLIES.—If—

"(1) an installment obligation is distributed in a liquidation to which section 332 (relating to complete liquidations of subsidiaries) applies, and "(2) the basis of such obligation in the hands of the distributee is determined under section 334(b)(1), then no gain or loss with respect to the distribution of such obligation shall be recognized by the distributing corporation." (10) Paragraph (5) of section 467(c) is amended by striking out "453B(d)(2),". (11) Subsection (b) of section 852 is amended by adding at the end thereof the following new paragraph: "(6) SECTION 3 1 1 (b) NOT TO APPLY TO CERTAIN DISTRIBUTIONS.—

Section 311(b) shall not apply to any distribution by a regulated

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