Page:United States Statutes at Large Volume 94 Part 3.djvu/761

 PUBLIC LAW 96-589—DEC. 24, 1980

94 STAT. 3405

(2) Paragraph (2) of section 357(c) (relating to liabilities in 26 USC 357. excess of basis) is amended to read as follows: "(2) EXCEPTIONS.—Paragraph (1) shall not apply to any exchange— "(A) to which subsection (b)(1) of this section applies, "(B) to which section 371 or 374 applies, or "(C) which is pursuant to a plan of reorganization within the meaning of section 368(a)(1)(G) where no former shareholder of the transferor corporation receives any consideration for his stock." (3) Paragraph (1) of section 368(a) (defining reorganization) is 26 USC 368. amended— (A) by striking out "or" at the end of subparagraph (E), and (B) by striking out the period at the end of subparagraph (F) and inserting in lieu thereof "; or". (4) Subsection (b) of section 368 (defining party to reorganization) is amended— (A) by striking out "or (1)(C)" in the third sentence and inserting in lieu thereof "(I)(C), or (IXG)", and (B) by striking out "paragraph (I)(A)" in the fourth sentence and inserting in lieu thereof "paragraph (I)(A) or (1)(G)". (5) The table of sections for part IV of subchapter C of chapter 1 is amended by inserting before the item relating to section 371 the following new item: "Sec. 370. Termination of part." SEC. 5. MISCELLANEOUS CORPORATE AMENDMENTS. (a) EXCEPTION FROM PERSONAL HOLDING COMPANY TAX FOR CORPORATIONS IN TITLE 11 OR SIMILAR CASES.—Subsection (c) of section 542 n u s e lOi et

(relating to exceptions from definition of personal holding company) Ig^ug^ 542 is amended by striking out the period at the end of paragraph (8) and inserting in lieu thereof "; and' and by adding at the end thereof the following new paragraph: "(9) a corporation which is subject to the jurisdiction of the court in a title 11 or similar case (within the meaning of section 368(a)(3)(A)) unless a major purpose of instituting or continuing such case is the avoidance of the tax imposed by section 541." (b) REDEMPTION OF STOCK ISSUED IN RAILROAD REORGANIZATIONS.—

(1) IN GENERAL.—Subsection (b) of section 302 (relating to 26 USC 302. redemptions treated as exchanges) is amended by striking out paragraph (4) and by redesignating paragraph (5) as paragraph (4). (2) CONFORMING AMENDMENTS.—

(A) Subsection (a) of section 302 is amended by striking out "(2), (3), or (4)" and inserting in lieu thereof "(2), or (3)". (B) Paragraph (4) of section 3020)) (as redesignated by paragraph (1)) is amended— (i) by striking out "(2), (3), or (4)" and inserting in lieu thereof "(2) or (3)", and (ii) by striking out "(1), (2), or (4)" and inserting in lieu thereof "(Dor (2)". (c) SECTION 337 To APPLY WHERE LIQUIDATING CORPORATION Is

INSOLVENT.—Section 337 (relating to gain or loss on sales or exchanges in connection with certain liquidations) is amended by adding at the end thereof the following new subsection:

26 USC 337.

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