Page:United States Statutes at Large Volume 47 Part 1.djvu/221

 72d CONGRESS. SESS. I. CH. 209 . JUNE 6, 1932 . 197 the gain, if any, to the recipient shall be recognized, but in an utlb3E TAX amount not in excess of the sum of such money and the fair market value of such other property. (2) If a distribution made in pursuance of a plan of reorgani_ Reorganization al s- ro tributmu cons trued as zation is within the p rovisions of par agraph (1) of th is subsection a tax able divi dend . but has the effect of the distribution of a taxable dividend, then there shall be taxed 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 Feb runi ul bogs after of the c orpor ation accum ulate d aft er Feb ruary 28, 1913 . The Tat on gain fr om remainder, if any, of the gain recognized under paragraph (1) property exchange. shall be taxed as a gain from the exchange of property. d SAME-GAIN OF CORPORATION .-If an ex cha nge wou ld be Reorganizatio n with property and other within the provi sions of subsect ion (b) (4 of th is section if it were stoekreceived. not for the fact that the property receive in exchange consists not on ly of stock or securities permitted by su ch paragraph to be received without the recognition of gain, but also of other property or mo ney, the n- (1) If the corporat ion rece iving su ch other propert y or mon ey oNoo gai ni fdison but ed distributes it in pursuance of the plan of reorganization, no gain to the corporation shall be recognized from the exchange, but (2) If the c orporati on recei ving suc h other p roperty or money Gain recognized. does not distribute it in pursuance of the plan of reorganization, the ga in, if any, to t he corporation s hall be recogniz ed, but in an amount not in excess of the sum of such money and the fair Limitation, market value of such other property so received, which is not so distributed. (e) Loss FROM EXCHANGES NOT SOLELY IN KIND .-If an e xchang e No loss if pr operty o received other tha n would be within the provisions of subsection (b) (1) to (5), inclu- that on which gain or sive, of this section if it were not for the fact that the property loss recognized. received in exchange consists not only of property permitted by such paragraph to be received without the recognition of gain or loss, but also of other pro erty or money, then no loss from the exchange shall be recognize (f) INVOLUNTARY CoNvERSIONs .-If prop erty (as a resul t of its Involuntary conver. sionss destruction in whole or in part, theft or seizure, or an exercise of No' gain or loss, it in . volnntanly converted the power of requisition or condemnation, or the threat or imminence into simila r property, thereof) is compulsorily or involuntarily converted into property etc • similar or relat ed in service or use to the prop erty so converted, or into money which is forthwith in good faith, under regulations pre- scribed by the Commissioner with the approval of the Secretary, expended in the acquisition of other property similar or related in service or use to the property so converted or in the acquisition of contro l of a corporation owning such other prope rty, o r in the establishment of a replacement fund, no gain or loss shall be recog- Gain recognized on nized. If any part of the money is no t so expended, th e gain, if any, part not used . shall be recognized, but in an amount not in excess of the money which is not so expended. ( g) DIS TRIBU TION OF STOC K ON REORGANIZATION .-If there is dis- Stock distribution on reorganization and tributed, in pursuance of a plan of reorganization, to a shareholder holdings es no t surren- in a corporation a party to the reorganization, stock or securities in such cor poration or in a nother c orporati on a part y to the reor- ganization, without the surrender by such shareholder of stock or securities in su ch a corporation, no gain to the distributee from the No gain to distrib. 'No from receipt ree- recei t of such stock or securities shall be recognized. ognized. (h) SAME-Em'r'rCT ON FUTuiti DISTRIBUTIONS .-The distribution Stock distributed on ~ reorganization not eon• in pur suanc e of a plan of reorganization by or on behalf of a strued as earnings, etc. corporation a party to the reorganization, of its stock or securities or stock or securities in a corporation a party to the reorganization, if