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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3380 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3380

To amend the Internal Revenue Code of 1986 to provide for the treatment 
   of securities of a controlled corporation exchanged for assets in 
                        certain reorganizations.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 17, 2010

 Mr. Rockefeller (for himself and Mr. Kerry) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To amend the Internal Revenue Code of 1986 to provide for the treatment 
   of securities of a controlled corporation exchanged for assets in 
                        certain reorganizations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TREATMENT OF SECURITIES OF A CONTROLLED CORPORATION 
              EXCHANGED FOR ASSETS IN CERTAIN REORGANIZATIONS.

    (a) In General.--Section 361 of the Internal Revenue Code of 1986 
(relating to nonrecognition of gain or loss to corporations; treatment 
of distributions) is amended by adding at the end the following new 
subsection:
    ``(d) Special Rules for Transactions Involving Section 355 
Distributions.--In the case of a reorganization described in section 
368(a)(1)(D) with respect to which stock or securities of the 
corporation to which the assets are transferred are distributed in a 
transaction which qualifies under section 355--
            ``(1) this section shall be applied by substituting `stock 
        other than nonqualified preferred stock (as defined in section 
        351(g)(2))' for `stock or securities' in subsections (a) and 
        (b)(1), and
            ``(2) the first sentence of subsection (b)(3) shall apply 
        only to the extent that the sum of the money and the fair 
        market value of the other property transferred to such 
        creditors does not exceed the adjusted bases of such assets 
        transferred (reduced by the amount of the liabilities assumed 
        (within the meaning of section 357(c))).''.
    (b) Conforming Amendment.--Paragraph (3) of section 361(b) of the 
Internal Revenue Code of 1986 is amended by striking the last sentence.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to exchanges after 
        the date of the enactment of this Act.
            (2) Transition rule.--The amendments made by this section 
        shall not apply to any exchange pursuant to a transaction which 
        is--
                    (A) made pursuant to an agreement which was binding 
                on March 15, 2010, and at all times thereafter;
                    (B) described in a ruling request submitted to the 
                Internal Revenue Service on or before such date; or
                    (C) described on or before such date in a public 
                announcement or in a filing with the Securities and 
                Exchange Commission.
                                 <all>
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