26 USC 301 - Distributions of property

U.S Code last checked for updates: Oct 17, 2024

§ 301.

Distributions of property

(a)

In general

(b)

Amount distributed

(1)

General rule

(2)

Reduction for liabilities

The amount of any distribution determined under paragraph (1) shall be reduced (but not below zero) by—

(A)

the amount of any liability of the corporation assumed by the shareholder in connection with the distribution, and

(B)

the amount of any liability to which the property received by the shareholder is subject immediately before, and immediately after, the distribution.

(3)

Determination of fair market value

(c)

Amount taxable

In the case of a distribution to which subsection (a) applies—

(1)

Amount constituting dividend

(2)

Amount applied against basis

(3)

Amount in excess of basis

(A)

In general

(B)

Distributions out of increase in value accrued before March 1, 1913

(d)

Basis

(e)

Special rule for certain distributions received by 20 percent corporate shareholder

(1)

In general

(2)

20 percent corporate shareholder

For purposes of this subsection, the term “20 percent corporate shareholder” means, with respect to any distribution, any corporation which owns (directly or through the application of section 318)—

(A)

stock in the corporation making the distribution possessing at least 20 percent of the total combined voting power of all classes of stock entitled to vote, or

(B)

at least 20 percent of the total value of all stock of the distributing corporation (except nonvoting stock which is limited and preferred as to dividends),

but only if, but for this subsection, the distributee corporation would be entitled to a deduction under section 243 or 245 with respect to such distribution.

(3)

Application of section 312(n)(7) not affected

(4)

Regulations

(f)

Special rules

(1)

For distributions in redemption of stock, see section 302.

(2)

For distributions in complete liquidation, see part II (sec. 331 and following).

(3)

For distributions in corporate organizations and reorganizations, see part III (sec. 351 and following).

(4)

For taxation of dividends received by individuals at capital gain rates, see section 1(h)(11).

(Aug. 16, 1954, ch. 736, 68A Stat. 84; Pub. L. 87–403, § 2(a), Feb. 2, 1962, 76 Stat. 5; Pub. L. 87–834, §§ 5(a), (b), 13(f)(2), Oct. 16, 1962, 76 Stat. 977, 1035; Pub. L. 88–272, title II, § 231(b)(2), Feb. 26, 1964, 78 Stat. 105; Pub. L. 88–484, § 1(b)(1), Aug. 22, 1964, 78 Stat. 597; Pub. L. 89–570, § 1(b)(2), Sept. 12, 1966, 80 Stat. 762; Pub. L. 89–809, title I, § 104(f), Nov. 13, 1966, 80 Stat. 1559; Pub. L. 91–172, title II, § 211(b)(1), (2), title IX, § 905(b)(2), Dec. 30, 1969, 83 Stat. 570, 714; Pub. L. 92–178, title III, § 312(a), Dec. 10, 1971, 85 Stat. 526; Pub. L. 94–455, title II, § 205(c)(1)(B), (C), title XIX, §§ 1901(a)(41), (b)(32)(A), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1535, 1771, 1800, 1834; Pub. L. 95–628, § 3(a), (b), Nov. 10, 1978, 92 Stat. 3627; Pub. L. 98–369, div. A, title I, §§ 54(b), 61(d), title VII, § 712(i)(1), July 18, 1984, 98 Stat. 569, 582, 948; Pub. L. 99–514, title VI, § 612(b)(1), title XVIII, § 1804(f)(2)(B), Oct. 22, 1986, 100 Stat. 2250, 2805; Pub. L. 100–203, title X, § 10222(b)(1), Dec. 22, 1987, 101 Stat. 1330–411; Pub. L. 100–647, title I, § 1006(e)(10)–(12), title II, § 2004(j)(3)(B), Nov. 10, 1988, 102 Stat. 3401, 3402, 3605; Pub. L. 108–27, title III, § 302(e)(2), May 28, 2003, 117 Stat. 763; Pub. L. 113–295, div. A, title II, § 221(a)(41)(G), Dec. 19, 2014, 128 Stat. 4044.)

cite as: 26 USC 301