26 USC 337 - Nonrecognition for property distributed to parent in complete liquidation of subsidiary

U.S Code last checked for updates: Nov 22, 2024

§ 337.

Nonrecognition for property distributed to parent in complete liquidation of subsidiary

(a)

In general

(b)

Treatment of indebtedness of subsidiary, etc.

(1)

Indebtedness of subsidiary to parent

If—

(A)

a corporation is liquidated in a liquidation to which section 332 applies, and

(B)

on the date of the adoption of the plan of liquidation, such corporation was indebted to the 80-percent distributee,

for purposes of this section and section 336, any transfer of property to the 80-percent distributee in satisfaction of such indebtedness shall be treated as a distribution to such distributee in such liquidation.

(2)

Treatment of tax-exempt distributee

(A)

In general

(B)

Exception where property will be used in unrelated business

(i)

In general

(ii)

Later disposition or change in use

(c)

80-percent distributee

(d)

Regulations

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of the amendments made by subtitle D of title VI of the Tax Reform Act of 1986, including—

(1)

regulations to ensure that such purposes may not be circumvented through the use of any provision of law or regulations (including the consolidated return regulations and part III of this subchapter) or through the use of a regulated investment company, real estate investment trust, or tax-exempt entity, and

(2)

regulations providing for appropriate coordination of the provisions of this section with the provisions of this title relating to taxation of foreign corporations and their shareholders.

(Added Pub. L. 99–514, title VI, § 631(a), Oct. 22, 1986, 100 Stat. 2271; amended Pub. L. 100–203, title X, § 10223(a), Dec. 22, 1987, 101 Stat. 1330–411; Pub. L. 100–647, title I, § 1006(e)(4), (5)(A), Nov. 10, 1988, 102 Stat. 3400.)

cite as: 26 USC 337