Page:United States Statutes at Large Volume 43 Part 1.djvu/288

SIXTY-EIGHTH CONGRESS. Sess. I. Ch. 234. 1924. 257 party to the reorganization, without the surrender by such share- ¤*°°**¤ MX- older of stock or securities in such a corporation, no gain to the distrigptee from the receipt of such stock or securities shall be recogmz . (d) (1) If an exchange would be within the provisions of para- ,,I;¤¢>¤¢¤i¢i<>¤ ,<>;d8:g{ graph (1), (2), or (4) o subdivision (b) if it were not for the fact dil)i<ii:ilslrtll;d°clli7at_ on that the property received in exchange consists not only of property `"“°h "°“°’°°°“‘“’°d‘ permitted by such paragraph to be received without the recognition of gain, but also of other property or money, then the gain, if any, to the recipient shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other pr(2))%rtI5f d b ad f 1 a istri ution m e in pursuance o a an of reor aniza- R¤¤¤‘¤¤¤i¤¤¢*<>¤ dis tion is within the provisions of paragraph (1) bldt has the e%ect of xlifiiilgiviiigitdslmw the distribution of a taxable dividend, then there shall be taxed as · a dividend to each distributee such an amount of the gain recognized under paragraph (1) as is not in excess of his ratable share of the undistributed earnings and prohts of the corporation accumulated after February 28, 1913. The remainder, if any, of the recognized under paragraph (1) shall be taxed as a gain from the exchange of property. . _ _ _ _ (e) If an exchan e would be within the provisions of paragraph {fg (3) of subdivision gb) if it were not for the fact that the property . received in exchange consists not only of stock or securities permitted by such paragraph to be received without the recognition of gain, but also of other property or money, then- (1) If the corporation receiving such other property or money aff? 8**** i' °*S**“’· distributes it in pxursuance of the plan of reorganization, no gain to ` the corporation s all be recognized from the exchange, but _ _ (2) If the corporation receiving such other property or money ¤¤(i£¤1i»°¤i°°¤$‘<ii"°d if does not distribute it in pursuance of the plan of reorganization, the gain, if any, to the corporation shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property so received, which is not so distributed. (f) If an exchan e would be within the provisions of paragraph prilp°ili°$° ixeiimng (1), pp), (3), or (4% of subdivision (b) if it were not for the fact :L}g°°*:¤¤,,;;*¤; ’*¤*¤g,{,¤ that the roperty received in exchange consists not only of property wm ` permitted) by such paragraph to be received without the recognition of gain or oss, but also of other property or money, then no loss from the exchangp shall be recognized. (g) The distri ution, in pursuance of a plan of reorganization by reg:§’.$ia°l.l§°{,ibL1.i€dmii°l or on behalf of a corporation a party to the reorgamzation, of, its :;,***6 ¤= ¤*¤¤f¤*¤¤=· stock or securities or stock or securities in a corporation a party to ` the reorganization, shall not be considereda distribution of earnings or profits within the meaning of subdivision (b) of section 201 for the purpose of determining the taxability of subsequent distributions by the corporation. (h As used in this section and sections 201 and 204- R¤¤rs¤¤iwi¤¤- (1 The term " reorganization " means (A) a merger or con- ,,§n°gj_°;°“°“ °°‘°°“‘ solidation (including the acquisition by one corporation of at least a majorit of the voting stock and at least a majority of the total number of, shares of all other classes of stock of another corporation, or substantially all the properties of another corporation), or (g3) a transfer by a corporation of all or a part of its assets to anot er corporation if immediately after the transfer the transferor or its stockholders or both are in control of the corporation to which the assets are transferred, or (C) a recapitalization, or (D) a mere chan e in identity, form, or place of organization, however effected. (E2? The term ‘ a party to a reorganization " includes a corpora- ,d°,,‘§R‘{""°§‘; f,‘§"’§“,‘},§ tion resulting from a reorganization and includes both corporations a¤¤h•¤Eiin the case of an acquisition by one corporation of at least a ma-