83 STAT. ]
PUBLIC LAW 91-172-DEC. 30, 1969
„ change in redemption price, a difference between redemption price a and issue price, a redemption which is treated as a distribution to which section 301 applies, or any transaction (including a recapitalization) having a similar effect on the interest of any shareholder shall be treated as a distribution with respect to any shareholder whose proportionate interest in the earnings and profits or assets of the corporal-ion is increased by such change, difference, redemption, or similar transaction. "(d)
DEFINITIONS.— "(1) EIGHTS TO ACQUIRE STOCK.—For
purposes of this section, the term 'stock' includes rights to acquire such stock. "(2) SHAREHOLDERS.—For purposes of subsections (b) and (c), the term 'shareholder' includes a holder of rights or of convertible securities. -••:•>.. • nr-.r^f^;::;:.^::.:- ;-: • v^; "(e)
"For special rules— "(1) Relating to the receipt of stock and stock rights in corporate organizations and reorganizations, see part III (sec. 351 and following). "(2) In the case of a distribution which results in a gift, see section 2501 and following. "(3) In the case of a distribution which has the effect of the payment of compensation, see section 61(a)(1)," (b) EFFECTIVE DATES.—
(1) Except as otherwise provided in this subsection, the amendment made by subsection (a) shall apply with respect to distributions (or deemed distributions) made after January 10, 1969, in taxable years ending after such date. (2)(A) Section 305(b)(2) of the Internal Revenue Code of 1954 (as added by subsection (a)) shall not apply to a distribution (or deemed distribution) of stock made before January 1, 1991, with respect to stock (i) outstanding on January 10, 1969, (ii) issued pursuant to a contract binding on January 10, 1969, on the distributing corporation, (iii) which is additional stock of that class of stock which (as of January 10, 1969) had the largest fair market value of all classes of stock of the corporation (taking into account only stock outstanding on January 10, 1969, or issued pursuant to a contract binding on January 10, 1969), (iy) described in subparagraph (C) (iii), or (v) issued in a prior distribution described in clause (i), ( i i), (iii), or (iv). (B) Subparagraph (A) shall apply only if— (i) the stock as to which there is a receipt of property was outstanding on January 10, 1969 (or was issued pursuant to a contract binding on January 10, 1969, on the distributing corporation), and (ii) if such stock and any stock described in subparagraph (A)(i) were also outstanding on January 10, 1968, a distribution of property was made on or before January 10, 1969, with respect to such stock, and a distribution of stock was made on or before January 10, 1969, with resx)ect to such stock described in subparagraph (A)(i). (C) Subparagraph (A) shall cease to apply when at any time after October 9, 1969, the distributing corporation issues any of its stock (other than in a distribution of stock with respect to stock of the same class) which is not— (i) nonconvertible preferred stock, (ii) additional stock of that class of stock which meets the requirements of subparagraph (A) (iii),or
68A Stat. 84. 26 USC 301.