Page:United States Statutes at Large Volume 68A.djvu/155

 CH. 1—NORMAL TAXES AND SURTAXES

115

SEC. 356. RECEIPT OF ADDITIONAL CONSIDERATION. (a)

G A I N ON EXCHANGES.— (1) RECOGNITION OF GAIN.—If—

(A) section 354 or 355 would apply to an exchange b u t for the fact that (B) the property received in the exchange consists not only of property permitted by section 354 or 355 to be received without the recognition of gain but also of other property or money, then the gain, if any, to the recipient shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property. (2) TREATMENT AS DIVIDEND.—If an exchange is described in paragraph (1) but has the effect of the distribution of a dividend, then there shall be treated as a dividend to each distributee such an amount of the gain recognized under paragraph (1) as is not in excess of his ratable share of the undistributed earnings and profits of the corporation accumulated after February 28, 1913. The remainder, if any, of the gain recognized under paragraph (1) shall be treated as gain from the exchange of property. (b)

ADDITIONAL CONSIDERATION RECEIVED IN CERTAIN D I S T R I -

BUTIONS.—'If—

(1) section 355 would apply to a distribution but for the fact that (2) the property received in the distribution consists not only of property permitted by section 355 to be received without the recognition of gain, but also of other property or money, then an amount equal to the sum of such money and the fair market value of such other property shall be treated as a distribution of property to which section 301 applies. (c) Loss.—If—• (1) section 354 would apply to an exchange, or section 355 would apply to an exchange or distribution, but for the fact that (2) the property received in the exchange or distribution consists not only of property permitted by section 354 or 355 to be received without the recognition of gain or loss, but also of other property or money, then no loss from the exchange or distribution shall be recognized. (d) SECURITIES AS OTHER PROPERTY.—For purposes of this section—• (1) IN GENERAL.—Except as provided in paragraph (2), the term "other property" includes securities. (2) EXCEPTIONS. — (A) SECURITIES WITH RESPECT TO WHICH NONRECOGNITION OF GAIN WOULD BE PERMITTED.—The term "other property" does

not include securities to the extent that, under section 354 or 355, such securities would be permitted to be received without the recognition of gain. (B)

GREATER PRINCIPAL AMOUNT IN SECTION 354 EXCHANGE.—

If— (i) in an exchange described in section 354 (other than subsection (c) thereof), securities of a corporation a party to the 1356(d)(2)(B)(i)

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