Page:United States Statutes at Large Volume 68A.djvu/146

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INTERNAL REVENUE CODE OF 1954

(c) PROPERTY RECEIVED IN LIQUIDATION UNDER SECTION 333.—• If— (1) property was acquired by a shareholder in the liquidation of a corporation in cancellation or redemption of stock, and (2) with respect to such acquisition— (A) gain was realized, but (B) as the result of an election made by the shareholder under section 333, the extent to which gain was recognized was determined under section 333, then the basis shall be the same as the basis of such stock cancelled or redeemed in the liquidation, decreased in the amount of any money received by the shareholder, and increased in the amount of gain recognized to him. Subpart B—Eflfects on Corporation Sec. 336. General rule. Sec. 337. Gain or loss on sales or exchanges in connection with certain liquidations. Sec. 338. Effect on earnings and profits. SEC. 336. GENERAL RULE.

Except as provided in section 453(d) (relating to disposition of installment obligations), no gain or loss shall be recognized to a corporation on the distribution of property in partial or complete liquidation. SEC. 337. GAIN OR LOSS ON SALES OR EXCHANGES IN CONNECTION WITH CERTAIN LIQUIDATIONS. (a) GENERAL RULE. — I f —

(1) a corporation adopts a plan of complete liquidation on or after June 22, 1954, and (2) within the 12-month period beginning on the date of the adoption of such plan, all of the assets of the corporation are distributed in complete liquidation, less assets retained to meet claims, then no gain or loss shall be recognized to such corporation from the sale or exchange by it of property within such 12-month period. (b) PROPERTY D E F I N E D. —

(1) IN GENERAL.—For purposes of subsection (a), the term "property" does not include— (A) stock in trade of the corporation, or other property of a kind which would properly be included in the inventory of the corporation if on hand at the close of the taxable year, and property held by the corporation primarily for sale to customers in the ordinary course of its trade or business, (B) installment obligations acquired in respect of the sale or exchange (without regard to whether such sale or exchange occurred before, on, or after the date of the adoption of the plan referred to in subsection (a)) of stock in trade or other property described in subparagraph (A) of this paragraph, and (C) installment obligations acquired in respect of property (other than property described in subparagraph (A)) sold or exchanged before the date of the adoption of such plan of liquidation. § 334(c)

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