Page:United States Statutes at Large Volume 53 Part 1.djvu/640

This page needs to be proofread.

SEC. 517. Nothing contained in this chapter shall be deemed to affect or apply to the creditors of any debtor under a mortgage insured pursuant to the National Housing Act and Acts amendatory thereof and supplementary thereto; nor shall its provisions be deemed to allow extension or impairment of any secured obliga- tion held by Home Owners' Loan Corporation or by any Federal Home Loan Bank or member thereof. SwO. 518 . a. The provisions of section 5 of the Securities Act of 1933 shall not apply to- (1) any security issued by a trustee or debtor in possession pursuant to section 446 of this Act; or (2) any transaction in any security issued pursuant to an arrangement in exchange for securities of or claims against the debtor or partly in such exchange and partly for cash and/or property, or issued upon exercise of any right to subscribe or conversion privilege so issued, except (a) transactions by an issuer or an underwriter in connection with a distribution otherwise than pursuant to the arrangement, and (b) transactions by a dealer as to securities constituting the whole or a part of an unsold allotment to or subscription by such dealer as a participant in a distribution of such securities by the issuer or by or through an underwriter otherwise than pursuant to the arrangement. b. As used in this section, the terms "security," "issuer," "underwriter," and "dealer" shall have the meanings provided in section 2 of the Securities Act of 1933, and the term "Securities Act of 1933" shall be deemed to refer to such Act as heretofore or hereafter amended. SEC. 519. The clerk and, in the case of a reference, the referee after such reference, shall forthwith transmit to the Secretary of the Treasury copies of- (1) all petitions filed under sections 421 and 422 of this Act; (2) all notices given in a proceeding under this chapter; (3) all orders dismissing proceedings or directing that bankruptcy be pro- ceeded with, discharging debtors, closing estates and setting aside confirmations; (4) all orders appointing trustees or continuing debtors in possession; (5) all orders determining the time within which claims of creditors may be filed and allowed and the division of creditors into classes; (6) all orders confirming arrangements, together with copies of such arrange- ments; (7) all orders approving alterations or modifications in arrangements, to- gether with copies of such alterations or modifications; (8) all applications for allowances for compensation and expenses, and the orders making or refusing to make such allowances; and (9) such other papers filed in the proceedings as the Secretary of the Treas- ury may request or which the court may direct to be transmitted to him. Any order fixing the time for confirming an arrangement which affects claims of the United States shall include a notice to the Secretary of the Treasury of not less than thirty days. SEa 520. Except as provided In section 522 of this Act, no income or profit, taxable under any law of the United States or of any State now in force or which may hereafter be enacted, shall, in respect to the adjustment of the indebtedness of a debtor in a proceeding under this chapter, be deemed to have accrued to or to have been realized by a debtor, by a trustee provided for in an arrangement under this chapter, or by a corporation organized or made use of for effectuating an arrangement under this chapter by reason of a modification in or cancelation in whole or in part of any of the indebtedness of the debtor in an arrangement consummated under this chapter. SEC. 521. Where it appears that an arrangement has for one of its prin- cipal purposes the evasion of taxes, objection to its confirmation may be made on that ground by the Secretary of the Treasury or, in the case of a State, by the corresponding official or other person so authorized. Such objections shall be heard and determined by the judge, independently of other objections which may be made to the confirmation of the arrangement, and, if the judge shall be satisfied that such purpose exists, he shall refuse to confirm the arrangement. SEC. 522 . In determining the basis of property for any purposes of any law of the United States or of a State imposing a tax upon income, the basis of the debtor's property (other than money) or of such property (other than money) as is transferred to any person required to use the debtor's basis in whole or in part shall be decreased by an amount equal to the amount by which the indebtedness of the debtor, not including accrued interest unpaid and not resulting in a tax benefit on any income tax return, has been canceled or reduced in a proceeding under this chapter. The Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe such regulations as he may deem necessary in order to reflect such decrease in basis for Federal income tax purposes and otherwise carry into effect the purposes of this section. APPENDIX CXXXV