Page:United States Statutes at Large Volume 52.djvu/970

 52 STAT.] 75TH CONG. , 3 D SESS.-CH. 575-JUNE 22, 1938 "Any order fixing the time for confirming an arrangement which affects claims of the United States shall include a notice to the Secretary of the Treasury of not less than thirty days. "SEC. 520. Except as provided in section 522 of this Act, no income or profit, taxable under any law of the United States or of any State now in force or which may hereafter be enacted, shall, in respect to the adjustment of the indebtedness of a debtor in a proceeding under this chapter, be deemed to have accrued to or to have been realized by a debtor, by a trustee provided for in an arrangement under this chapter, or by a corporation organized or made use of for effectuating an arrangement under this chapter by reason of a modification in or cancelation in whole or in part of any of the indebtedness of the debtor in an arrangement consummated under this chapter. "SEC. 521. Where it appears that an arrangement has for one of its principal purposes the evasion of taxes, objection to its con- firmation may be made on that ground by the Secretary of the Treasury or, in the case of a State, by the corresponding official or other person so authorized. Such objections shall be heard and determined by the judge, independently of other objections which may be made to the confirmation of the arrangement, and, if the judge shall be satisfied that such purpose exists, he shall refuse to confirm the arrangement. "SEC. 522. In determining the basis of property for any purposes of any law of the United States or of a State imposing a tax upon income, the basis of the debtor's property (other than money) or of such property (other than money) as is transferred to any person required to use the debtor's basis in whole or in part shall be decreased by an amount equal to the amount by which the indebted- ness of the debtor, not including accrued interest unpaid and not resulting in a tax benefit on any income tax return, has been can- celled or reduced in a proceeding under this chapter. The Com- missioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe such regulations as he may deem necessary in order to reflect such decrease in basis for Federal income tax purposes and otherwise carry into effect the purposes of this section. "SEC. 523. Any provision in this chapter to the contrary notwith- standing, all taxes which may be found to be owing to the United States or any State from a debtor within one year from the date of the filing of a petition under this chapter and have not been assessed prior to the date of the confirmation of an arrangement under this chapter, and all taxes which may become owing to the United States or any State from a trustee of a debtor or from a debtor in possession shall be assessed against, may be collected from and shall be paid by the debtor, or the corporation organized or the trustee or corpora- tion made use of for effectuating an arrangement under this chapter: Provided, however, That the United States or any State may in writing accept the provisions of any arrangement dealing with the assumption, settlement, or payment of any such tax. "ARTICLE XTV-WHEN CHAPTER TAKE EFFECr "SEC. 526. (1) On and after the effective date of this amendatory Act, this chapter shall apply to debtors and their creditors, whether their rights, claims, and interests of any nature whatsoever have been acquired or created before or after such date; "(2) a petition may be filed under this chapter in a proceeding in bankruptcy which is pending on such date, and a petition may be filed under this chapter notwithstanding the pendency on such date of a proceeding in which a receiver or trustee of all or any part of 36525°-3 8-59 929 Certain income, etc., not deemed to have accrued by rea- son of modification, etc., of indebtedness. Where arrange- ment is for purpose of tax evasion. Determination of basis of property for income tax purposes. Taxes found owing within one year of filing petition, assess - mlent and payment. Proviso. Settlement, etc. When chapter takes effect.

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