Source: http://taxtv.com/code/00296-USCODE-2011-title26-subtitleA-chap1-subchapC-partI-subpartA-sec306/
Timestamp: 2017-11-20 17:34:25
Document Index: 686917686

Matched Legal Cases: ['§306', '§306', '§306', '§1901', '§702', '§401', '§222', '§712', '§11801', '§302', '§302', '§712', '§712', '§222', '§222', '§702', '§702', '§1901', '§1906', '§1901', '§401', '§702', '§401']

IRC §306. Dispositions of certain stock - TaxTV.com
IRC §306. Dispositions of certain stock
View related content: IRC §306
If a shareholder sells or otherwise disposes of section 306 stock (as defined in subsection (c))—
If such disposition is not a redemption (within the meaning of section 317(b))—
(A) The amount realized shall be treated as ordinary income. This subparagraph shall not apply to the extent that—
(ii) such stock’s ratable share of the amount which would have been a dividend at the time of distribution if (in lieu of section 306 stock) the corporation had distributed money in an amount equal to the fair market value of the stock at the time of distribution.
(B) Any excess of the amount realized over the sum of—
(D) Treatment as dividend.—For purposes of section 1(h)(11) and such other provisions as the Secretary may specify, any amount treated as ordinary income under this paragraph shall be treated as a dividend received from the corporation.
(1) Termination of shareholder’s interest, etc.
If the disposition—
If it is established to the satisfaction of the Secretary—
For purposes of this subchapter, the term “section 306 stock” means stock which meets the requirements of subparagraph (A), (B), or (C) of this paragraph.
Stock which is not common stock and—
For purposes of this section, the term “section 306 stock” does not include any stock no part of the distribution of which would have been a dividend at the time of the distribution if money had been distributed in lieu of the stock.
(3) Certain stock acquired in section 3 exchange
The term “section 306 stock” also includes any stock which is not common stock acquired in an exchange to which section 3 applied if receipt of money (in lieu of the stock) would have been treated as a dividend to any extent. Rules similar to the rules of section 304(b)(2) shall apply—
If a substantial change is made in the terms and conditions of any stock, then, for purposes of this section—
(2) such stock’s ratable share of the amount which would have been a dividend if money had been distributed in lieu of stock shall be determined as of the time of distribution or as of the time of such change, whichever such ratable share is higher; and
(Aug. 16, 1954, ch. 736, 68A Stat. 90; Pub. L. 94–455, title XIX, §§1901(b)(3)(J), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1793, 1834; Pub. L. 95–600, title VII, §702(a)(1), (2), Nov. 6, 1978, 92 Stat. 2925; Pub. L. 96–223, title IV, §401(a), Apr. 2, 1980, 94 Stat. 299; Pub. L. 97–248, title II, §§222(e)(1)(A), (2), 226(b), 227(a), Sept. 3, 1982, 96 Stat. 480, 492; Pub. L. 98–369, div. A, title VII, §712(i)(2), (l)(5)(B), (6), July 18, 1984, 98 Stat. 948, 954; Pub. L. 101–508, title XI, §11801(a)(18), Nov. 5, 1990, 104 Stat. 1388–521; Pub. L. 108–27, title III, §302(e)(3), May 28, 2003, 117 Stat. 763.)
2003—Subsec. (a)(1)(D). Pub. L. 108–27, §§302(e)(3), 303, temporarily added subpar. (D). See Effective and Termination Dates of 2003 Amendment note below.
1990—Subsec. (h). Pub. L. 101–508 struck out subsec. (h) which related to stock received in distributions and reorganizations to which 1939 Code applied.
1984—Subsec. (b)(1). Pub. L. 98–369, §712(i)(2), substituted “interest, etc.” for “interest” in heading.
Subsec. (c)(4). Pub. L. 98–369, §712(l)(5)(B), substituted “the rules of section 304(c)(3)(B) shall apply” for “sections 318(a)(2)(C) and 318(a)(3)(C) shall be applied without regard to the 50 percent limitation contained therein”.
1982—Subsec. (b)(1)(B). Pub. L. 97–248, §222(e)(2), substituted “paragraph (3) or (4) of section 302(b)” for “section 302(b)(3)”.
Subsec. (b)(2). Pub. L. 97–248, §222(e)(1)(A), struck out “partial or” before “complete liquidation”.
1980—Subsecs. (a)(3), (b)(5). Pub. L. 96–223 repealed the amendments made by Pub. L. 95–600, §702(a)(1), (2). See 1978 Amendment notes below.
1978—Subsec. (a)(3). Pub. L. 95–600, §702(a)(1), added par. (3) which related to ordinary income from the sale or redemption of section 306 stock which was carryover basis property adjusted for 1976 value. See Repeals note below.
1976—Subsec. (a)(1)(A), (B)(i). Pub. L. 94–455, §1901(b)(3)(J), substituted “ordinary income” for “gain from the sale of property which is not a capital asset”.
Subsec. (b)(4). Pub. L. 94–455, §1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (f). Pub. L. 94–455, §1901(b)(3)(J), substituted “ordinary income” for “gain from the sale of property which is not a capital asset”.
Section 227(c)(1) of Pub. L. 97–248 provided that: “The amendment made by subsection (a) [amending this section] shall apply to stock received after August 31, 1982, in taxable years ending after such date.”
Section 702(a)(3) of Pub. L. 95–600 provided that the amendments made by section 702(a) of Pub. L. 95–600 would apply to the estates of decedents dying after Dec. 31, 1979, prior to repeal by Pub. L. 96–223, title IV, §401(a), Apr. 2, 1980, 94 Stat. 299.
Pub. L. 95–600, §702(a)(1), (2), cited as a credit to this section, and the amendments made thereby, were repealed by Pub. L. 96–223, title IV, §401(a), Apr. 2, 1980, 94 Stat. 299, resulting in the text of this section reading as it read prior to enactment of section 702(a)(1), (2). See Effective Date of 1980 Amendment and Revival of Prior Law note above.