CH. 1
NORMAL TAXES AND SURTAXES
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been actively conducted throughout the 5-year period immediately before the distribution, which trade or business was not acquired by the corporation within such period in a transaction in which gain or loss was recognized in whole or in part. (2) Immediately after the distribution the liquidating corporation is actively engaged in the conduct of a trade or business, which trade or business was actively conducted throughout the 5-year period ending on the date of the distribution and was not acquired by the corporation within such period in a transaction in which gain or loss was recognized in whole or in part. Whether or not a distribution meets the requirements of paragraphs (1) and (2) of this subsection shall be determined without regard to whether or not the distribution is pro rata with respect to all of the shareholders of the corporation. (c) TREATMENT OF CERTAIN REDEMPTIONS.—The fact that, with respect to a shareholder, a distribution qualifies under section 302(a) (relating to redemptions treated as distributions in part or full payment in exchange for stock) by reason of section 302(b) shall not be taken into account in determining whether the distribution, with respect to such shareholder, is also a distribution in partial liquidation of the corporation. PART III—CORPORATE ORGANIZATIONS AND REORGANIZATIONS Subpart Subpart Subpart Subpart
A. B. C. D.
Corporate organizations. Effects on shareholders and security holders. Effects on corporations. Special rule; definitions.
Subpart A—Corporate Organizations Sec. 351. Transfer to corporation controlled by transferor.
SEC. 351. TRANSFER TO CORPORATION CONTROLLED BY TRANSFEROR. (a) GENERAL RULE. — N o gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock or securities in such corporation and immediately after the exchange such person or persons are in control (as defined in section 368(c)) of the corporation. For purposes of this section, stock or securities issued for services shall not be considered as issued in return for property. (b) R E C E I P T OF PROPERTY.—If subsection (a) would apply to an exchange but for the fact that there is received, in addition to the stock or securities permitted to be received under subsection (a), other property or money, then— (1) gain (if any) to such recipient shall be recognized, but not in excess of— (A) the amount of money received, plus (B) the fair market value of such other property received; and (2) no loss to such recipient shall be recognized. (c) SPECIAL RULE. — I n determining control, for purposes of this section, the fact that any corporate transferor distributes part or all §351(0)
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