Page:United States Statutes at Large Volume 49 Part 1.djvu/1726

 74TH CONGRESS. SESS. II. CH. 690 . JUNE 22, 1936 . 16 81 amoun t not in excess of the sum of such money and the fair ma rket value of such other property so received, which is not so distributed. (e) Loss FR OM EXCHANGES NOT SOLELY IN KIND.-If an exchange Loss from exchanges would be within the provisions of subsection (b) (1) to (5), in cl u- not solely in kind. sive, of this section if it were not for t he fact that th e prope rty 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 property or money, then no loss fr om the exchange shall be recognized. (f) INVOLUNTARY CONVERSIONS .-If property (as a result of its Involun tary c onver- sio ns. destruction in whole or in part, theft or seizure, or an exercise of No gain or loss, if in- voluntarily converted the power of requisition or condemnation, or the threat or imminence into similar property, thereo f) is c ompulsor ily or involunt arily converted into property etc. similar or related in service or use to the property 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 control ofa corporation owning such other property, or in the establishment of a replacement fund, no gain or loss shall be recog- Gai n recognized on nized. If any part of the money is not so expended, the gain, if part not expended . any, shall be recognized, but in an amount not in excess of the money which is not so expended. (g) DEFINITION OF REORGANIZATION .-AS used in this section and Reorganization. section 113- (1) The term "reorganization" means (A) a statutory merger Definitions' or consolidation, or (B) the acquisition by one corporation in exchange solely for all or a part of its voting stock : of at least 80 per centum of the voting stock and at least 80 per centum of the total number of shares of all other classes of stock of another corporation ; or of substantially all the properties of another corporation, or (C) a transfer by a corporation of all or a part of its assets to another corporation if immediately after the transfer the transferor or its stockholders or both are in control of the corporation to which the assets are transferred, or (D) a recapi- talization, or (E) a mere change in identity, form, or place of organization, however effected. (2) The term "a party to a reorganization" includes a corpora- "A party to a rear' ga nizat ion ." tion resulting from a reorganization and includes both corporations in the case of a reorganization resulting fr om the acquisit ion by one corporation of stock or properties of another. (h) D EFINIT ION OF CONTROL.-AS used in this section the term "Control" defined. "control" means the ownership of stock possessing at least 80 per centum of the total combined voting power of all classes of stock entitled to vote and at least 80 per centum of the total number of shares of all other classes of stock of the corporation. Foreign (i) FOREIGN CORPORATIoNs.-In det erm ini ng the extent to which Not ~ cor pora tions. ~i gain shall be recognized in the case of any of the exchanges (made Pu rposet an s to evade after the date of the enactment of this Act) described in subsection (b) (3), (4) . (5), or (6), or described in so much of subsection (c) as refers to subsection (b) (3) or (5), or described in subsection (d), a foreign corporation shall not be considered as a corpo ration unles s, prior to such exchange, it has been established to the satisfaction of the Commissioner that such exchange is not in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes. 104019'-36-10(1