PUBLIC LAWS-CH. 63--FEB. 25, 1944 63 Stat. 37. 26U.S. C. 112(b); Sup. III , §112 (b). Post, pp. 41, 46. SEC. 120. ELECTION AS TO RECOGNITION OF GAIN IN CERTAIN COR- PORATE LIQUIDATIONS. (a) IN GENERAL. -Section 112 (b) (relating to certain exchanges of property) is amended by inserting after paragraph (6) the following: "(7) ELECTION AS TO RECOGNITION OF GAIN IN CERTAIN CORPO- RATE LIQUIDATIONS.- "(A) General Rule.- In the case of property distributed in complete liquidation of a domestic corporation, if- "(i) the liquidation is made in pursuance of a plan of liquidation adopted after the date of the enactment of the Revenue Act of 1943, whether the taxable year of the corporation began on, before, or after January 1, 1944; and "(ii) the distribution is in complete cancelation or redemption of all the stock, and the transfer of all the property under the liquidation occurs within some one calendar month in 1944- then in the case of each qualified electing shareholder (as defined in subparagraph (C)) gain upon the shares owned by him at the time of the adoption of the plan of liquidation shall be recognized only to the extent provided in subpara- graphs (E) and (F). "(B) Excluded Corporation. -The term 'excluded corpo- ration' means a corporation which at any time between December 10, 1943, and the date of the adoption of the plan of liquidation, both dates inclusive, was the owner of stock possessing 50 per centum or more of the total combined voting power of all classes of stock entitled to vote on the adoption of such plan. "(C) Qualified Electing Shareholders.- The term 'quali- fied electing shareholder' means a shareholder (other than an excluded corporation) of any class of stock (whether or not entitled to vote on the adoption of the plan of liquidation) who is a shareholder at the time of the adoption of such plan, and whose written election to have the benefits of sub- paragraph (A) has been made and filed in accordance with subparagraph (D), but- "(i) in the case of a shareholder other than a corpora- tion, only if written elections have been so filed by share- holders (other than corporations) who at the time of the adoption of the plan of liquidation are owners of stock possessing at least 80 per centum of the total combined voting power (exclusive of voting power possessed by stock owned by corporations) of all classes of stock entitled to vote on the adoption of such plan of liquida- tion; or "(ii) in the case of a shareholder which is a corpora- tion, only if written elections have been so filed by cor- porate shareholders (other than an excluded corporation) which at the time of the adoption of such plan of liquida- tion are owners of stock possessing at least 80 per centum of the total combined voting power (exclusive of voting power possessed by stock owned by an excluded corpora- tion and by shareholders who are not corporations) of all classes of stock entitled to vote on the adoption of such plan of liquidation. "(D) Making and Filing of Elections.- The written elec- tions referred to in subparagraph (C) must be made and filed [58 STAT. 40
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