Page:United States Statutes at Large Volume 80 Part 1.djvu/1612

 1576

68A Stat. 291; 74 Stat. 998.

76 Stat. 963.

PUBLIC LAW 89-809-NOV. 13, 1966

[80 STAT.

benefits of section 931 or 934(b)) or by a United States citizen (other than a citizen entitled to the benefits of section 931, 932, 933, or 934(c)) and which is used predominantly in a possession of the United States by such a corporation or such a citizen, or by a corporation created or organized in, or under the law of, a possession of the United States." (b) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply to taxable years ending after December 31, 1965, but only with respect to property placed in service after such date. I n applying section 46(b) of the Internal Revenue Code of 1954 (relating to carryback and carryover of unused credits), the amount of any investment credit carryback to any taxable year ending on or before December 31, 1965, shall be determined without regard to the amendments made by this section. SEC. 202. BASIS OF PROPERTY RECEIVED ON LIQUIDATION OF SUBSIDIARY. (a) DEFINITION OF PURCHASE.—Section 334(b)(3) (relating to

definition of purchase) is amended by adding at the end thereof the following new sentence: "Notwithstanding subparagraph (C) of this paragraph, for purposes of paragraph (2)(B), the term 'purchase' also means an acquisition of stock from a corporation when ownership of such stock would be attributed under section 318(a) to the person acquiring such stock, if the stock of such corporation by reason of which such ownership would be attributed was acquired by purchase (within the meaning of the preceding sentence)." (b) PERIOD OF ACQUISITION.—Section 3 3 4 (b)(2)(B) (relating to exception) is amended by striking out "during a period of not more than 12 months," and inserting in lieu thereof "during a 12-month period beginning with the earlier of— " (i) the date of the first acquisition by purchase of such stock, or "(ii) if any of such stock was acquired in an acquisition which is a purchase within the meaning of the second sentence of paragraph (3), the date on which the distributee is first considered under section 318(a) as owning stock owned by the corporation from which such acquisition was made,". (c) DISTRIBUTION OF INSTALLMENT OBLIGATIONS.—Section 453(d)

(4)(A) (relating to distribution of installment obligations in certain liquidations) is amended to read as follows: " (A) LIQUIDATIONS TO W H I C H SECTION 332 A P P L I E S. — I f —

" (i) an installment obligation is distributed in a liquidation to which section 332 (relating to complete liquidations of subsidiaries) applies, and "(ii) the basis of such obligation in the hands of the distributee is determined under section 334(b)(1), then no gain or loss with respect to the distribution of such obligation shall be recognized by the distributing corporation." (d) EFFECTIVE DATES.—The amendment made by subsection (a) shall apply only with respect to acquisitions of stock after December 31, 1965. The amendments made by subsections (b) and (c) shall apply only with respect to distributions made after the date of the enactment of this Act.

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