Page:United States Statutes at Large Volume 56 Part 1.djvu/962

 PUBLIC LAWS-CH. 619-OCT. 21, 1942 63 Stat. 43. 26U.8C. 113(a) (15). subsection (b), an adjusted basis at the time so received deter- mined as follows: "(A) The aggregate of the property (other than money) held by the transferor at the time of the acquisition by the transferee of control of the transferor (or, if such share was acquired after the acquisition of such control, at the time of the acquisition of such share, or, if such control was not ac- quired, at the time immediately prior to the receipt of any property in the intercorporate liquidation in respect of such share) shall be deemed to have an aggregate basis equal to the amount obtained by (i) multiplying the amount of the ad- justed basis at such time of such share in the hands of the transferee by the aggregate number of share units in the transferor at such time (the interest represented by such share being taken as the share unit), and (ii) adjusting for the amount of money on hand and the liabilities of the transferor at such time. "(B) The basis which property of the transferor is deemed to have under subparagraph (A) at the time therein specified shall be used in determining the basis of property subse- quently acquired by the transferor the basis of which is de- termined with reference to the basis of property specified in subparagraph (A). "(C) The basis which property of the transferor is deemed to have under subparagraphs (A) and (B) at the time therein - specified shall be used in determining all subsequent adjust- ments to the basis of such property. "(D) The property so received by the transferee shall be deemed to have, at the time of its receipt, the same basis it is deemed to have under the foregoing provisions of this para- graph in the hands of the transferor, or in the case of prop- erty not specified in subparagraph (A) or (B), the same basis it would have had in the hands of the transferor. "(E) Only such part of the aggregate property received by the transferee in the intercorporate liquidation as is attrib- utable to such share shall be considered as having the adjusted basis which property is deemed to have under sub- paragraphs (A), (B), (C), and (D) of this paragraph. "(2) BASIS OF STOCK NOT A COST BASIS. -The property received by a transferee in an intercorporate liquidation attributable to a share of stock having in the hands of the transferee a basis de- termined to be a basis other than a cost basis shall, for the pur- poses of subsection (b), be considered to have, at the time of its receipt, the basis it would have had had the first sentence of section 113 (a) (15) been applicable. "(3) DEFINITION OF CONTROL-As used in this subsection, the term '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 the ownership of at least 80 per centum of the total number of shares of all other classes of stock (except nonvoting stock which is limited and preferred as to dividends), but only if in both cases such ownership continues until the com- pletion of the intercorporate liquidation. "(d) ADjSTMRENT OF EQUITY INvESTED CAPrrIAL-If property is received by the transferee in an intercorporate liquidation, in com- puting the equity invested capital of the transferee for any day fol- lowing the completion of such intercorporate liquidation- "(1) with respect to any share of stock in the transferor hav- ing in the hands of the transferee, immediately prior to the receipt 934 [56 STAT.

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