PUBLIC LAWS--CL 289-MAY 28, 1938 No distribution be- fore 1936. Distribution a com. plete stock cancela- tion, etc. Distribution one of a series of distribu- tions, etc. Period for comple- tion. Bond to insure In- come, etc., taxes. Distribution in com- plete liquidation but not within meaning of corporate law. per centum of the total number of shares of all other classes of stock (except nonvoting stock which is limited and pre- ferred as to dividends), and was at no time on or after the date of the adoption of the plan of liquidation and until the receipt of the property the owner of a greater percentage of any class of stock than the percentage of such class owned at the time of the receipt of the property; and (B) no distribution under the liquidation was made before the first day of the first taxable year of the corporation beginning after December 31, 1935; and either (C) the distribution is by such other corporation in com- plete cancellation or redemption of all its stock, and the transfer of all the property occurs within the taxable year; in such case the adoption by the shareholders of the resolu- tion under which is authorized the distribution of all the assets of such corporation in complete cancellation or redemp- tion of all its stock, shall be considered an adoption of a plan of liquidation, even though no time for the completion of the transfer of the property is specified in such resolution; or (D) such distribution is one of a series of distributions by such other corporation in complete cancellation or redemption of all its stock in accordance with a plan of liquidation under which the transfer of all the property under the liquidation is to be completed within three years from the close of the taxable year during which is made the first of the series of distributions under the plan, except that if such transfer is not completed within such period, or if the taxpayer does not continue qualified under subparagraph (A) until the comple- tion of such transfer, no distribution under the plan shall be considered a distribution in complete liquidation. If such transfer of all the property does not occur within the taxable year the Commissioner may require of the taxpayer such bond, or waiver of the statute of limitations on assessment and collection, or both, as he may deem necessary to insure, if the transfer of the property is not completed within such three-year period, or if the taxpayer does not continue qualified under sub- paragraph (A) until the completion of such transfer, the assess ment and collection of all income, war-profits, and cxcess-profits taxes then imposed by law for such taxable year or subseq(uent taxable years, to the extent attributable to property so received. A distribution otherwise constituting a distribution in complete liquidation within the meaning of this paragraph shall not be considered as not constituting such a distribution merely because it does not constitute a distribution or liquidation within the meaning of the corporate law under which the distribution is made; and for the purposes of this paragraph a transfer of prop- erty of such other corporation to the taxpayer shall not be con- sidered as not constituting a distribution (or one of a series of distributions) in complete cancellation or redemption of all the stock of such other corporation, merely because the carrying out of the plan involves (i) the transfer under the plan to the tax- payer by such other corporation of property, not attributable to shares owned by the taxpayer, upon an exchange described in paragraph (4) of this subsection, and (ii) the complete cancella- tion or redemption under the plan, as a result of exchanges described in paragraph (3) of this subsection, of the shares not owned by the taxpayer. 486 [52 STAT. 4
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