84
INTERNAL REVENUE CODE OF 1954
Subchapter C—Corporate Distributions and Adjustments Part Part Part Part Part Part
I. II. III. IV. V. VI.
Distributions by corporations. Corporate liquidations. Corporate organizations and reorganizations. Insolvency reorganizations. Carryovers. Effective date of subchapter C.
PART I—DISTRIBUTIONS BY CORPORATIONS Subpart A. Effects on recipients. Subpart B. Effects on corporation. Subpart C. Definitions; constructive ownership of stock.
Subpart A—Effects on Recipients Sec. Sec. Sec. Sec. Sec. Sec. Sec.
301. 302. 303. 304. 305. 306. 307.
Distributions of property. Distributions in redemption of stock. Distributions in redemption of stock to pay death taxes. Redemption through use of related corporations. Distributions of stock and stock rights. Dispositions of certain stock. Basis of stock and stock rights acquired in distributions.
SEC. 301. DISTRIBUTIONS OF PROPERTY.
(a) IN GENERAL.—Except as otherwise provided in this chapter, a distribution of property (as defined in section 317(a)) made by a corporation to a shareholder with respect to its stock shall be treated in the manner provided in subsection (c). (b) AMOUNT DISTRIBUTED.— (1) GENERAL RULE.—For purposes of this section, the amount
of any distribution shall be— (A) NONCORPORATE DISTRIBUTEES.—If the shareholder is not a corporation, the amount of money received, plus the fair market value of the other property received. (B) CORPORATE DISTRIBUTEES.—If the shareholder is a corporation, the amount of money received, plus whichever of the following is the lesser: (i) the fair market value of the other property received; or (ii) the adjusted basis (in the hands of the distributing corporation immediately before the distribution) of the other property received, increased in the amount of gain to the distributing corporation which is recognized under subsection (b) or (c) of section 311. (2) REDUCTION FOR LIABILITIES.— The amount of any distribution determined under paragraph (1) shall be reduced (but not below zero) by— (A) the amount of any liability of the corporation assumed by the shareholder in connection with the distribution, and (B) the amount of any liability to which the property received by the shareholder is subject immediately before, and immediately after, the distribution. §301
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