Page:United States Statutes at Large Volume 83.djvu/741

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

SEC. 905. CORPORATIONS USING APPRECIATED PROPERTY TO REDEEM THEIR OWN STOCK. (a) GEXERALKuLE.--Section:Ul (reliiting to tsixsibility of corporation on distribution) is amended by adding at the end thereof the following new subsection: "(d)

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AVPRECIATED PlJOl'EUTY U s E D To R E D E E M S TO C K. " (1) INGEXERAL.—If—

" (A) a corporation distributes property (other tlian an obligation of such corporation) to a shareholder in a redemption (to which subpart A applies) of part or all of his stock in such corporation, and " (B) the fair market A'alue of such property exceeds its adjusted basis (in the hands of the distributing corporation), then again shall be recognized to the distributing corporation in an amount equal to such excess as if the property distributed had been sold at the time of the distribution. Subsections (b) and (c) shall not apply to any distribution to which this subsection applies. "(2) ExcEi'-rioxs AXD LI^MITATIOXS.—Paragraph (1) shall not apply to— " (A) a distribution in complete redemption of all of the stock of a shareholder who, at all times within the 1-2-month period eiuling on the date of such distribution, owns at least 10 percent in value of the outstanding stock of the distributing corporation, but only if the redemption (jualifies under section o02(b)(P>) (determined without the application of 26 USC 302. section 302(c)(2)(A) ( i i)); " (B) a distribution of stock or an obligation of a corporation— "(i) which is engaged in at least one trade or business, "(ii) which has not received property constituting a substantial part of its assets from the distributing corporation, in a transaction to which section 351 applied or as a contribution to capital, within the r)-year period ending on the date of the distribution, and "(iii) at least 50 percent in value of the outstanding stock of which is owned by the distributing corporation at any time within the 9-year perid ending one year before the date of the distribution; " (C) a distribution before Deceml)er 1, 1974, of stock of a corporation substantially all of the assets of which the distributing crporation (or a corporation which is a member of the same afliliated group (as defined in section 1504(a)) as ^^^J'Vr^J^!,^" the distributing corporation) held on November 30, lOGO, if 26 USC 1504. such assets constitute a trade oi' business which has been actively conducted throughout the one-yeai- period ending on the date of the distribution; "(1)) a distribution of stock or securities pursuant to the terms of a final judgment rendered by a court with respect to the distributing corporation in a court proceeding under the Sherman Act (20 Stat. 209; 15 TLS.(\ 1-7) or the Clayton Act (38 Stat. 730: 15 U.S.C. 12-27), or both, to which the United States is a party, but only if the distiibution of such stock or securities in redemption of the distributing corporation's stock is in furtherance of the purposes of the judgment; " (E) a distribution to the extent that section 303(a) (relating to distributions in redemption of stock to pay death taxes) applies to such distribution;

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