Source: https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section305&num=0&edition=prelim
Timestamp: 2020-08-13 07:03:45
Document Index: 758403598

Matched Legal Cases: ['§ 305', '§421', '§1906', '§321', '§103', '§11322', '§13206', '§831', '§401', '§11322', '§11801', '§103', '§103', '§321', '§401', '§831', '§11322', '§321', '§421', '§2']

[USC02] 26 USC 305: Distributions of stock and stock rights
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26 USC 305: Distributions of stock and stock rights Text contains those laws in effect on August 12, 2020
Subsection (a) shall not apply to a distribution by a corporation of its stock, and the distribution shall be treated as a distribution of property to which section 301 applies-
If the distribution is, at the election of any of the shareholders (whether exercised before or after the declaration thereof), payable either-
If the distribution (or a series of distributions of which such distribution is one) has the result of-
For purposes of this section and section 301, the Secretary shall prescribe regulations under which a change in conversion ratio, a change in redemption price, a difference between redemption price 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 corporation is increased by such change, difference, redemption, or similar transaction. Regulations prescribed under the preceding sentence shall provide that-
If any person purchases after April 30, 1993, any stripped preferred stock, then such person, while holding such stock, shall include in gross income amounts equal to the amounts which would have been so includible if such stripped preferred stock were a bond issued on the purchase date and having original issue discount equal to the excess, if any, of-
Stock is described in this subsection if such stock-
For purposes of this subsection, the term "purchase" means-
For special rules-
(Aug. 16, 1954, ch. 736, 68A Stat. 90 ; Pub. L. 91–172, title IV, §421(a), Dec. 30, 1969, 83 Stat. 614 ; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834 ; Pub. L. 97–34, title III, §321(a), (b), Aug. 13, 1981, 95 Stat. 287 , 289; Pub. L. 97–448, title I, §103(f), Jan. 12, 1983, 96 Stat. 2378 ; Pub. L. 101–508, title XI, §§11322(a), 11801(a)(17), (c)(7), Nov. 5, 1990, 104 Stat. 1388–463 , 1388-521, 1388-524; Pub. L. 103–66, title XIII, §13206(c)(1), Aug. 10, 1993, 107 Stat. 465 ; Pub. L. 108–357, title VIII, §831(b), Oct. 22, 2004, 118 Stat. 1587 ; Pub. L. 115–141, div. U, title IV, §401(c)(2)(D), Mar. 23, 2018, 132 Stat. 1206 .)
2018-Subsec. (e)(7). Pub. L. 115–141 substituted "1286(e)" for "1286(f)".
2004-Subsec. (e)(7). Pub. L. 108–357 added par. (7).
1990-Subsec. (c). Pub. L. 101–508, §11322(a), inserted sentence at end specifying the contents of regulations.
Subsec. (d)(1). Pub. L. 101–508, §11801(c)(7)(A), struck out "(other than subsection (e))" after "this section".
1983-Subsec. (e)(3)(A). Pub. L. 97–448, §103(f)(1), substituted "placed in service qualified long-life public utility property having a cost equal to at least 60 percent of the aggregate cost of all tangible property described in subparagraph (A) or (B) of section 1245(a)(3) placed in service by the corporation during such period" for "acquired public utility recovery property having a cost equal to at least 60 percent of the aggregate cost of all tangible property described in section 1245(a)(3) (other than subparagraphs (C) and (D) thereof) acquired by the corporation during such period".
Subsec. (e)(3)(C)(ii). Pub. L. 97–448, §103(f)(2), substituted definition of "qualified long-life public utility property" for definition of "public utility recovery property" which had been defined as public utility property (within the meaning of section 167(l)(3)(A)) which was recovery property which was 10-year property or 15-year public utility property (within the meaning of section 168), except that any requirement that the property be placed in service after December 31, 1980, did not apply.
1981-Subsec. (d)(1). Pub. L. 97–34, §321(b), inserted "(other than subsection (e))" after "this section".
1976-Subsecs. (b)(5), (c). Pub. L. 94–455 struck out "or his delegate" after "Secretary".
1969-Subsec. (a). Pub. L. 91–172 substituted reference to this section for reference to subsec. (b), and omitted reference to rights to acquire its stock.
Pub. L. 115–141, div. U, title IV, §401(c)(2)(E), Mar. 23, 2018, 132 Stat. 1206 , provided that: "The amendments made by this paragraph [amending this section and section 1286 of this title] shall apply to bonds purchased on or after July 2, 1982."
Pub. L. 108–357, title VIII, §831(c), Oct. 22, 2004, 118 Stat. 1587 , provided that: "The amendments made by this section [amending this section and section 1286 of this title] shall apply to purchases and dispositions after the date of the enactment of this Act [Oct. 22, 2004]."
Pub. L. 101–508, title XI, §11322(b), Nov. 5, 1990, 104 Stat. 1388–464 , provided that:
"(1) In general.-Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to stock issued after October 9, 1990.
"(2) Exception.-The amendment made by subsection (a) shall not apply to any stock issued after October 9, 1990, if-
"(A) such stock is issued pursuant to a written binding contract in effect on October 9, 1990, and at all times thereafter before such issuance,
"(B) such stock is issued pursuant to a registration or offering statement filed on or before October 9, 1990, with a Federal or State agency regulating the offering or sale of securities and such stock is issued before the date 90 days after the date of such filing, or
"(C) such stock is issued pursuant to a plan filed on or before October 9, 1990, in a title 11 or similar case (as defined in section 368(a)(3)(A) of the Internal Revenue Code of 1986)."
Pub. L. 97–34, title III, §321(c), Aug. 13, 1981, 95 Stat. 289 , provided that: "The amendments made by this section [amending this section] shall apply to distributions after December 31, 1981, in taxable years ending after such date."
Pub. L. 91–172, title IV, §421(b), Dec. 30, 1969, 83 Stat. 615 , as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095 , provided that:
"(1) Except as otherwise provided in this subsection, the amendment made by subsection (a) [amending this section] 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 1986 [formerly I.R.C. 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), (iv) described in subparagraph (C)(iii), or (v) issued in a prior distribution described in clause (i), (ii), (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 respect 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
"(iii) preferred stock which is convertible into stock which meets the requirements of subparagraph (A)(iii) at a fixed conversion ratio which takes account of all stock dividends and stock splits with respect to the stock into which such convertible stock is convertible.
"(D) For purposes of this paragraph, the term 'stock' includes rights to acquire such stock.
"(3) In cases to which Treasury Decision 6990 (promulgated January 10, 1969) would not have applied, in applying paragraphs (1) and (2) April 22, 1969, shall be substituted for January 10, 1969.
"(4) Section 305(b)(4) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall not apply to any distribution (or deemed distribution) with respect to preferred stock (including any increase in the conversion ratio of convertible stock) made before January 1, 1991, pursuant to the terms relating to the issuance of such stock which were in effect on January 10, 1969.
"(5) With respect to distributions made or considered as made after January 10, 1969, in taxable years ending after such date, to the extent that the amendment made by subsection (a) [amending this section] does not apply by reason of paragraph (2), (3), or (4) of this subsection, section 305 of the Internal Revenue Code of 1986 (as in effect before the amendment made by subsection (a)) shall continue to apply."