Page:United States Statutes at Large Volume 58 Part 1.djvu/62

 PUBLIC LAWS-CH.E 63-FEB. 25, 1944 49 Stat. 922. 11U. 8 .. . 205 (m). 48 Stat. 912; 52 Stat. 883. 11 TU.S.C. §. 207 note, 501 -676. 53 Stat. 37. 26U..C.§112; Supp. II, § 112. Ante, pp. 40, 41; post pp. 43, 44, 46. Ante, p. 41. 53 Stat. 40 . 26U.S.C. 113 (a). Ante, p. 41; poet, p. 46. Supra. 56 Stat. 839. 26 U. 8. C., SBpp. HI, 113 (a) (21). Ante, p. 41. 63 Stat. 39. 26U.S.C. 112(d), (e). Post, p. 43. 52 Stat. 904. 11U.S.C. 67G. corporation (other than a railroad corporation, as defined in section 77m of the National Bankruptcy Act, as amended) is transferred, in a taxable year of such corporation beginning after December 31, 1933, in pursuance of an order of the court having jurisdiction of such corporation- "(A) in a receivership, foreclosure, or similar proceeding, or "(B) in a proceeding under section 77B or Chapter X of the National Bankruptcy Act, as amended, to another corporation organized or made use of to effectuate a plan of reorganization approved by the court in such proceeding, in exchange solely for stock or securities in such other cor- poration." (b) RECOGNITON OF GAIN OR LOSS OF SECURITr HOLDERS IN CON- NECTION WITH CERTAIN CORPORATE REORGANIZATIONS.-Section 112 (relating to recognition of gain or loss) is amended by inserting at the end thereof the following: "(1) EXCHANGES BY SECURITY HOLDERS IN CONNEOTION WITH CERTAIN CORPORATE REORGANIZATIONS.- "(1) GENERAL RULE.- NO gain or loss shall be recognized upon an exchange consisting of the relinquishment or extinguishment of stock or securities in a corporation the plan of reorganization of which is approved by the court in a proceeding described in subsection (b) (10), in consideration of the acquisition solely of stock or securities in a corporation organized or made use of to effectuate such plan of reorganization. "(2) EXCHANGE OCCURRING IN TAXABLE YEARS BEGINNING PRIOR TO JANUARY I, 1943.-If the exchange occurred in a taxable year of the person acquiring such stock or securities beginning prior to January 1, 1943, then, under regulations prescribed by the Commissioner with the approval of the Secretary, gain or loss shall be recognized or not recognized- "(A) to the extent that it was recognized or not recog- nized in the final determination of the tax of such person for such taxable year, if such tax was finally determined prior to the ninetieth day after the date of the enactment of the Revenue Act of 1943; or "(B) in cases to which subparagraph (A) is not appli- cable, to the extent that it would be recognized or not recognized under the latest treatment of such exchange by such person prior to December 15, 1943, in connection with his tax liability for such taxable year." (c) BASIS.-Section 113 (a) (relating to basis of property) is amended- (1) by inserting after "112 (b) to (e), inclusive," in paragraph (6) the following: "or section 112 (1),"; (2) by inserting after "property permitted by section 112 (b)" in pagraph (6) the following: or section 112 (1)"; and (3) by inserting after paragraph (21) the following: "(22) PROPERTY ACQUJRED ON REORGANIZATION OF CERTAIN CORPORATIONS.-If the property was acquired by a corporation upon a transfer to which section 112 (b) (10), or so much of section 112 (d) or (e) as relates to section 112 (b) (10), is applicable, then, notwithstanding the provisions of section 270 of the National Bankruptcy Act, as amended, the basis in the hands of the acquiring corporation shall be the same as it would be in the hands of the corporation whose property was so acquired, increased in the amount of gain recognized to the corporation whose property was so acquired under the law applicable to the [58 STAT.

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