Page:United States Statutes at Large Volume 84 Part 2.djvu/735

 84 STAT. ]

PUBLIC LAW 91-681-JAN. 12, 1971

"(2) if any such advertising states separately the amount to be paid for such transportation or the amount of such taxes, shall state such total at least as prominently as the more prominently stated of the amount to be paid for such transportation or the amount of such taxes and shall describe such taxes substantially as: 'user taxes to pay for airport construction and airway safety and operations'.". SEC. 4. The amendments made by the third se> tion of this Act shall apply to transportation beginning after June 30, 1970. Approved January 12, 1971.

20(55

Effective date,,

Public Law 91-681 AN ACT To aineiul sertion 307 of the I n t e r n a l Revenue Code of 1954.

January 12, 1971 [H. R. 19686]

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 367 Taxes. Foreign of the Internal Revenue Code of 1954 (relating to foreign corpora- co^orau^ns. tions) is amended to read as follows: ^^A Stat. 119. '

26 USC 367.

"SEC. 367. FOREIGN CORPORATIONS. " (a) GENERAL RULE. — I n determining the extent to which gain shall be recognized in the case of any of the exchanges described in section 332, 351, 354, 355, 356, or 361, a foreign corporation shall not 8o^ltlt!l577.°^' be considered as a corporation unless— " (1) before such exchange, or "(2) in the case of an exchange described in subsection (b), either before or after such exchange, it has been established to the satisfaction of the Secretary or his delegate that such exchange is not in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes. " (b) APPLICATION or SUBSECTION (a)(2).—Subsection (a)(2) shall apply in the case of a mere change in fonn in which there is an exchange by a foreign corporation of— " (1) stock in one foreign corporation for, " (2) stock in another foreign corporation, if the corporations referred to in paragraphs (1) and (2) differ only in their form of organization, and if the ownership of the corporation referred to in paragraph (1) immediately before such exchange is identical to the ownership of the corporation referred to in paragraph (2) immediately after such exchange. "(c)

SECTION

355

DISTRIBUTIONS TREATED AS EXCHANGES.—For

purposes of this section, any distribution described in section 355 (or so much of section 356 as relates to section 355) shall be treated as an exchange whether or not it is an exchange. "(d)

C O N T R I B U T I O N S OF C A P I T A L TO CONTROLLED CORPORATIONS.—

For purposes of this chapter, any transfer of property to a foreign corporation as a contribution to the capital of such corporation by one or more persons who, immediately after the transfer, own (within the meaning of section 318) stock possessing at least 80 percent of the ^^^A Stat. 99; total combined voting power of all classes of stock of such corporation ^*^** ^*^' entitled to vote shall be treated as an exchange of such property for stock of the foreign corporation equal in value to the fair market value of the property transferred unless, before such transfer, it has been established to the satisfaction of the Secretary or his delegate that such transfer is not in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes."

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