Page:United States Statutes at Large Volume 68A.djvu/163

 CH. 1—NORMAL TAXES AND SURTAXES

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amount of gain recognized to the corporation whose property was so acquired under the law appHcable to the year in which the acquisition occurred, and such basis shall not be adjusted under section 1017 by reason of a discharge of indebtedness in pursuance of the plan of reorganization under which such transfer was made, (b) STOCK OR SECURITY H O L D E R. —

For basis of stock or securities acquired under section 371(b), see section 358. SEC. 373. LOSS NOT RECOGNIZED IN CERTAIN RAILROAD REORGANIZATIONS. (a) NoNREcoGNiTiON OF Loss.—No loss shall be recognized if property of a railroad corporation, as defined in section 77(m) df the Bankruptcy Act (49 Stat. 922; 11 U.S.C. 205), is transferred in pursuance of an order of the court having jurisdiction of such corporation— (1) in a receivership proceeding, or (2) in a proceeding under section 77 of the Bankruptcy Act, to a railroad corporation (as defined in section 77(m) of the Bankruptcy Act) organized or made use of to effectuate a plan of reorganization approved by the court in such proceeding. - (b) B A S I S. — (1) RAILROAD CORPORATIONS.—If

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the property of a railroad corporation (as defined in section 77(m) of the Bankruptcy Act) was i acquired after December 31, 1938, in pursuance of an order of the court having jurisdiction of such corporation— (A) in a receivership proceeding, or (B) in a proceeding under section 77 of the Bankruptcy Act, and the acquiring corporation is a railroad corporation (as defined '• in section 77(m) of the Bankruptcy Act) organized or made use 1 of to effectuate a plan of reorganization approved by the court in i such proceeding, the basis shall be the same as it would be in the hands of the railroad corporation whose property was so acquired. (2) PROPERTY ACQUIRED BY STREET, SUBURBAN, OR INTERURBAN

I ELECTRIC RAILWAY CORPORATION.—If the property of any street, - suburban, or interurban electric railway corporation engaged as a common carrier in the transportation of persons or property in interstate commerce was acquired after December 31, 1934, in pursuance of an order of the court having jurisdiction of such corporation in a proceeding under section 77B of the Bankruptcy Act (48 ? Stat. 912), and the acquiring corporation is a street, suburban, or 1 interurban electric railway engaged as a common carrier in the transportation of persons or property in interstate commerce, organized or made use of to effectuate a plan of reorganization approved by the court in such proceeding, then, notwithstanding the provisions of section 270 of the Bankruptcy Act (52 Stat. 904; 11 U.S.C. 670), the basis shall be the same as it would be in the ' h and s of the corporation whose property was so acquired.

§ 373(b)(2)

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