Page:United States Statutes at Large Volume 49 Part 1.djvu/1065

 10 20 74 TH CONGRESS. SESS. I. CH. 829 . AU GUST 30, 1935 . under subsection (b) of this section ; and in no case shall the diminu- tion, by reason of such credit, of the tax imposed by such section 106 (computed without regard to this section) exceed the amount by which such special dividend exceeds the diminution permitted by this section in the tax imposed b y such section 13 ." (b) The amendment made by subsection (a) sha ll app ly, w ith respect to the tax imposed by section 13 of the Revenue Act of 1934, as amended, only in the case of taxable years beginning after Decem- ber 31, 1935 . Personal holding SEC. 109. PERSONAL HOLDING COMPANIES co mpani es . Vol. 48, p. 751. Taxable years to which applicable. Vol. 48, p. 686; Ante, p. 1015 . Impos ition o f tax . Rates . Vol.48,p.752. Taxable years which applicable . to Corporate liquida- tions . Vol.48,p.704. Exchange in liquida- tion . "Complete liquida- tion" construed . (a) Section 351 (a) of the Revenue Act of 1934 is amended to read as follows : "(a) IMPOSITION of TAX .-There shall be levied, collected, and paid, for each taxable year, upon the undistributed adjusted net in- come of every personal holding company a surtax equal to the sum of the following "(1) 20 per centum of the amount thereof not in excess of $2,000 p lus "(2) 30 per centum of the amount thereof in excess of $2,000 and not in excess of $100,000- plus t (3) 40 per centum of the amount thereof in excess of $100 .000 and not in excess of $500,000 ; plus "(4) 50 per centum of the amount thereof in excess of $500,000 and not in excess of $1,000,000 ; plus "(5) 60 per centum of the amount thereof in excess of $1,000,000 ." (b) Section 351 (b) (2) (C) of such Act is amended by striking out the period at the end thereof and inserting in lieu thereof a comma and the following : " and distributions (not in complete or partial liquidation and not a `dividend' as defined in section 115) made during the taxable year out of earnings or profits of such year ." (c) The amendments made by this section shall apply only in the case of taxable years beginning after December 31, 1935 . SEC . 110. CORPOR ATE LIQ UIDATI ONS (a) Se ction 112(b) of the Revenue Act of 1934 is amended by adding after paragraph (5) a new paragraph reading as follows : " (6) EXCHANGE IN LIQUIDATION .-No gain or loss shall be recog- nized upon the receipt by a corporation of property (other than mon ey) dist ributed in compl ete liqu idation of anoth er corpo ration, if the corporation receiving such property on such exchange was on the date of the enactment of the Revenue Act of 1935 and has continued to be at all times until the exchange, in control of such other corporation. As used in this paragraph 'complete liquidation' includes any one of a series of distributions by a corporation in com- plete cancellation or redemption of all its stock in accordance with a pla n of liq uidation under w hich the transfe r of the propert y under the l iquidation is to be complet ed within a t ime specified in the plan, not exceedi ng five years fr om the c lose of the taxa ble year during which is made the first of the series of distributions under the plan. If such transfer of property is not completed within the taxable year the Commissioner may require of the taxpayer, as a condition to the non- recognit ion of g ain unde r this p aragraph, such b ond, or waiver of the statute of limitations on assessment and collection, or both, as he may deem necessary to insure the assessment and collec- tion of the tax if the transfer of the property is not completed in accordance with the plan. This paragraph shall not apply to any liquidation if any distribution in pursuance thereof has been made before the date of the enactment of the Revenue Act of 1935 ."