104
INTERNAL REVENUE CODE OF 1954
(2) in the case of a shareholder which is a corporation, only if written elections have been so filed by corporate shareholders (other than an excluded corporation) which at the time of the adoption of such plan of liquidation are owners of stock possessing a t least 80 percent of the total combined voting power (exclusive of voting power possessed by stock owned by an excluded corporation and by shareholders who are not corporations) of all classes of stock entitled to vote on the adoption of such plan of liquidation. (d) M A K I N G AND F I L I N G OF ELECTIONS.^—The written
elections
referred to in subsection (c) must be made and filed in such manner as to be not in contravention of regulations prescribed by the Secretary or his delegate. The filing must be within 30 days after the date of the adoption of the plan of liquidation. (e) NONCORPORATE SHAREHOLDERS.—In the case of a qualified electing shareholder other than a corporation^—• (1) there shall be recognized, and treated as a dividend, so much of the gain as is not in excess of his ratable share of the earnings and profits of the corporation accumulated after February 28, 1913, such earnings and profits to be determined as of the close of the month in which the transfer in liquidation occurred under subsection (a)(2), b u t without diminution by reason of distributions made during such month; b u t by including in the computation thereof all amounts accrued up to the date on which the transfer of all the property under the liquidation is completed; and (2) there shall be recognized, and treated as short-term or longterm capital gain, as the case may be, so much of the remainder of the gain as is not in excess of the amount by which the value of that portion of the assets received by him which consists of money, or of stock or securities acquired by the corporation after December 31, 1953, exceeds his ratable share of such earnings and profits. (f) CORPORATE SHAREHOLDERS.—In the case of a qualified electing shareholder which is a corporation, the gain shall be recognized only to the extent of the greater of the two following— (1) the portion of the assets received by it which consists of money, or of stock or securities acquired by the liquidating corporation after December 31, 1953; or (2) its ratable share of the earnings and profits of the liquidating corporation accumulated after February 28, 1913, such earnings and profits to be determined as of the close of the month in which the transfer in liquidation occurred under subsection (a)(2), b u t without diminution by reason of distributions made during such month; b u t by including in the computation thereof all amounts accrued up to the date on which the transfer of all the property under the liquidation is completed. SEC. 334. BASIS OF PROPERTY RECEIVED IN LIQUIDATIONS. (a) GENERAL RULE. — I f property is received in a distribution in
partial or complete liquidation (other than a distribution to which section 333 applies), and if gain or loss is recognized on receipt of such property, then the basis of the property in the hands of the distributee shall be the fair market value of such property at the time of the distribution. § 333(c)(2)
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