Page:United States Statutes at Large Volume 70.djvu/198

 142

PUBLIC LAW 511-MAY 9, 1956 " (2)

^"*«' P* 135.

EXCHANGES INVOLVING PROHIBITED PROPERTY.—If—

" (A) Any qualified bank holding corporation exchanges (i) property, which, under subsection (a)(1), such corporation could distribute directly to its shareholders or security holders without the recognition of gain to such shareholders or security holders, and other property (except property described in subsection (b)(1)(B)(i)), for (ii) all of the stock of a second corporation created and availed of solely for the purpose of receiving such property; " (B) immediately after the exchange, the qualified bank holding corporation distributes all of such stock in a manner prescribed in subsection (a)(2)(A); and " (C) before such exchange, the Board has certified (with respect to the property exchanged which consists of property which, under subsection (a)(1), such corporation could distribute directly to its shareholders or security holders without the recognition of gain) that the exchange and distribution are necessary or appropriate to effectuate section 4 of the Bank Holding Company Act of 1956, then paragraph (1) shall not apply with respect to such distribution. "(3)

Ante, p. 133.

[70 S T A T.

EXCHANGES INVOLVING INTERESTS I N BANKS.—If—

" (A) any qualified bank holding corporation exchanges (i) property which, under subsection (b)(1), such corporation could distribute directly to its shareholders or security holders without the recognition of gain to such shareholders or security holders, and other property (except prohibited property), for (ii) all of the stock of a second corporation created and availed of solely for the purpose of receiving such property; " (B) immediately after the exchange, the qualified bank holding corporation distributes all of such stock in a manner prescribed in subsection (b)(2)(A); and " (C) before such exchange, the Board has certified (with respect to the property exchanged which consists of property which, under subsection (b)(1), such corporation could distribute directly to its shareholders or security holders without the recognition of gain) that— " (i) such property is all or part of the property by reason of which such corporation controls (within the meaning of section 2(a) of the Bank Holding Company Act of 1956) a bank or bank holding company, or such property is part of the property by reason of which such corporation did control a bank or a bank holding company before any property of the same kind was distributed under subsection (b)(1) or exchanged under this paragraph; and "(ii) the exchange and distribution are necessary or appropriate to effectuate the policies of such Act, then paragraph (1) shall not apply with respect to such distribution. "(d)

DISTRIBUTIONS To AVOID FEDERAL INCOME T A X. — "(1) PROHIBITED PROPERTY.—Subsection (a) shall

not apply to a distribution if, in connection with such distribution, the distributing corporation retains, or transfers after May 15, 1955, to any corporation, property (other than prohibited property) as part of a plan one of the principal purposes of which is the distribution of the earnings and profits of any corporation. "(2) BANKING PROPERTY.—Subsection (b) shall not apply to a distribution if, in connection with such distribution, the dis-

�