100 STAT. 2806
PUBLIC LAW 99-514—OCT. 22, 1986
"(3) no gain or loss shall be recognized by such corporation on any disposition (pursuant to the plan of reorganization) of stock or securities which were received pursuant to such plan and which are in another corporation which is a party to such reorganization. For purposes of paragraph (3), if the transferor corporation is merged, consolidated, or liquidated pursuant to the plan of reorganization, or if a transaction meets the requirements of section 368(a)(l)(C) pursuant to a waiver granted by the Secretary under section 368(a)(2)(G)(ii), any distribution of such stock or securities by the transferor corporation to its creditors in connection with such transaction shall be treated as pursuant to such plan of reorganization. "(c) TREATMENT OF DISTRIBUTIONS OF APPRECIATED PROPERTY.—
Notwithstanding any other provision of this subtitle, gain shall be recognized on the distribution of property (other than property permitted by section 354, 355, or 356 to be received without the recognition of gain) pursuant to a plan of reorganization in the same manner as if such property had been sold to the distributee at its fair market value." (2)
CLARIFICATION OF
TRANSFERS TO
CREDITORS.—Section
368(a)(2)(G)(i) (relating to distribution requirement) is amended by adding at the end thereof the following new sentence: "For purposes of the preceding sentence, if the acquired corporation is liquidated pursuant to the plan of reorganization, any distribution to its creditors in connection with such liquidation shall be treated as pursuant to the plan of reorganization." (3) CONFORMING AMENDMENT.—The table of sections for subpart C of part III of subchapter C of chapter 1 is amended by striking out the item relating to section 361 and inserting in lieu thereof the following: "Sec. 361. Nonrecognition of gain or loss to transferor corporation; other treatment of transferor corporation; etc." (4) EFFECTIVE DATE.—The amendments made by this subsec-
tion shall apply to plans of reorganizations adopted after the date of the enactment of this Act. (h) AMENDMENTS RELATED TO SECTION 64 OF THE ACT.—
(1) Subsection (c) of section 368 (defining control) is amended to read as follows: "(c) CONTROL DEFINED.—For purposes of part I (other than section 304), part II, this part, and part V, the term 'control' means the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation." (2) Paragraph (2) of section 368(a) is amended by adding at the end thereof the following new subparagraph:
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"(H) SPECIAL RULE FOR DETERMINING WHETHER CERTAIN TRANSACTIONS ARE QUALIFIED UNDER PARAGRAPH (1)(D).—In
the case of any transaction with respect to which the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met, for purposes of determining whether such transaction qualifies under subparagraph (D) of paragraph (1), the term 'control' has the meaning given to such term by section 304(c)."
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