596
PUBLIC LAW 88-484-AUG. 22, 1964
[78 STAT.
Public Law 88-484 August 22, 1964 [. R. 7301]
AN ACT rji^j aiueiid section 341 of the I n t e r n a l Revenue Code of 1954, relating to collapsible corporations, and to amend section 5 4 3 (a)(2) of such Code, relating to the inclusion of rents in personal holding company income.
Be it eimcted by the Senate and House of Representatives of the Taxes. United States of America in Congress assembled, That (a) section 341 Collapsible corpoVaturnsV"""" of the Internal Revenue Code of 1954 (relating to collapsible corpora68A Stat. 107; tions) is amended by striking out "except as provided in subsection 72 tat. 1615. (d), " in subsection (a) and inserting in lieu thereof "except as otherwise provided in this section," and by adding after subsection (e) the following new subsection: "(f)
CERTAIN SALES or
STOCK OF CONSENTING CORPORATIONS.—
"(1) IN GENERAL.—Subsection (a)(1) shall not apply to a sale of stock of a corporation (other than a sale to the issuing corporation) if such corporation (hereinafter in this subsection referred to as 'consenting corporation') consents (at such time and in such manner as the Secretary or-his delegate may by regulations prescribe) to have the provisions of paragraph (2) apply. Such consent shall apply wth respect to each sale of stock of such corporation made within the 6-month period beginning with the date on which such consent is filed. "(2) RECOGNITION OF GAIN.—Except as provided in paragraph (8), if a subsection (f) asset (as defined in paragraph (4)) is disposed of at any time by a consenting corporation (or, if paragraph (3) applies, by a transferee corporation), then the amount by which— " (A) in the case of a sale, exchange, or involuntary conversion, the amount realized, or " (B) in the case of any other disposition, the fair market value of such asset, exceeds the adjusted basis of such asset shall be treated as gain from the sale or exchange of such asset. Such gain shall be recognized notwithstanding any other provision of this subtitle, but only to the extent such gain is not recognized under any other provision of this subtitle. "(3)
68A Stat. 102; 26 USC 332, 351, 361, 371, 374.
EXCEFITON FOR CERTAIN TAX-FREE TRANSACTIONS.—If
the
basis of a subsection (f) asset in the hands of a transferee is determined by reference to its basis in the hands of the transferor by reason of the application of section 332, 351, 361, 371(a), or 374(a), then the amount of gain taken into account by the transferor under paragraph (2) shall not exceed the amount of gain Tecoguized to the transferor on the transfer of such asset (determined without regard to this subsection). This paragraph shall apply only if the transferee— " (A) is not an organization which is exempt from tax imposed by this chapter, and " (B) agrees (at such time and in such manner as the Secretary or his delegate may by regulations prescribe) to have the provisions of paragraph (2) apply to any disposition by it of such subsection (f) asset. "(4) SUBSECTION (f) ASSET DEFINED.—For purposes of this subsection— " (A) IN GENERAL.—The term 'subsection (f) asset' means any property which, as of the date of any sale of stock referred to in paragraph (1), is not a capital asset and is property owned by, or subject to an option to acquire held by, the consenting corporation. For purposes of this subparagraph, land or any interest in real property (other than
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