78rT CONG. , 2D SESS.-CH. 63 -FEB. 25, 1944 in such manner as to be not in contravention of regulations prescribed by the Commissioner with the approval of the Secretary. The filing must be within thirty days after the adoption of the plan of liquidation, and may be by the liquidating corporation or by the shareholder. "(E) Noncorporate Shareholders.-In the case of a quali- fied electing shareholder other than a corporation- "(i) There shall be recognized, and taxed as a divi- dend, so much of the gain as is not in excess of his ratable share of the earnings and profits of the corpora- tion 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 sub- paragraph (A) (ii), but without diminution by reason of distributions made during such month; but by includ- ing inrthe computation thereof all amounts accrued up to the date on which the transfer of all the property under the liquidation is completed; and "(ii) There shall be recognized, and taxed as short- term or long-term 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 10, 1943, 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- "(i) The portion of the assets received by it which consists of money, or of stock or securities acquired by the liquidating corporation after December 10, 1943; or "(ii) 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 liquida- tion occurred under subparagraph (A) (ii), but without diminution by reason of distributions made during such month; but 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." (b) BASIS. -Section 113 (a) (18) (relating to basis of property received in certain corporate liquidations) is amended by inserting after "paragraph (7) of section 112 (b)" the following: "of this Chapter or", and by striking out the comma preceding "of the Revenue Act of 1938". (c) ErrFFrIVE DATE.- The amendments made by subsections (a) and (b) shall be applicable with respect to taxable years ending after December 31, 1943. SEC. 121. REORGANIZATION OF CERTAIN INSOLVENT CORPORATIONS. (a) NONRECOGNmONo OF GAIN OR Loss ON CERTAIN REORGANIZA- TIoNS.- Section 112 (b) (relating to recognition of gain or loss upon certain exchanges) is amended by inserting at the end thereof the following: "(10) GADS OR Loss NOT RECOGNIZET ON REORGBAIZATION OF CORPORATIONS IN CERTAIN RECEIVERSHIP AND BANKRBPTC PRO- CEEDINas. - No gain or loss shall be recognized if property of a 53 Stat. 44. 26U.S. . § 113 (a) (18). 53 Stat. 37. 26U. S. o. 112 (b); Supp. n, 1 112 (b). Ante, p. 40; post, p 46. 58 STAT.]
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