PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3401
(ii) by inserting "or through the use of a regulated investment company, real estate investment trust, or tax-exempt entity" after "subchapter)" in paragraph (1). (B) The amendment made by subparagraph (A)(ii) shall not apply to any reorganization if before June 10, 1987— (i) the board of directors of a party to the reorganization adopted a resolution to solicit shareholder approval for the transaction, or (ii) the shareholders or the board of directors of a party to the reorganization approved the transaction. (6) Subsection (b) of section 334 of the 1986 Code is amended to read as follows: '(b) LIQUIDATION OF SUBSIDIARY.—
"(1) IN GENERAL.—If property is received by a corporate distributee in a distribution in a complete liquidation to which section 332(a) applies (or in a transfer described in section 337(b)(l)), the basis of such property in the hands of such distributee shall be the same as it would be in the hands of the transferor; except that, in any case in which gain or loss is recognized by the liquidating corporation with respect to such property, the basis of such property in the hands of such distributee shall be the fair market value of the property at the time of the distribution. "(2) CORPORATE DISTRIBUTEE.—For purposes of this subsection, the term 'corporate distributee' means only the corporation which meets the stock ownership requirements specified in section 332(b)." (7)(A) Subparagraph (B) of section 453(h)(l) of the 1986 Code is amended by striking out "to one person" and inserting in lieu thereof "to 1 person in 1 transaction". (B) Subparagraph (E) of section 453(h)(l) of the 1986 Code is amended by striking out "section 368(c)(l)" and inserting in lieu thereof "section 368(c)". (8)(A) Part VII of subchapter C of chapter 1 of the 1986 Code is hereby repealed. (B) Subsection (b) of section 311 of the 1986 Code is amended by adding at the end thereof the following new paragraph: "(3) SPECIAL RULE FOR CERTAIN DISTRIBUTIONS OF PARTNERSHIP
OR TRUST INTERESTS.—If the property distributed consists of an interest in a partnership or trust, the Secretary may by regulations provide that the amount of the gain recognized under paragraph (1) shall be computed without regard to any loss attributable to property contributed to the partnership or trust for the principal purpose of recognizing such loss on the distribution." (C) The table of parts for subchapter C of chapter 1 of the 1986 Code is amended by striking out the item relating to part VII. (9) Paragraph (1) of section 267(a) of the 1986 Code is amended— (A) by striking out "(other than a loss in case of a distribution in corporate liquidation)", and (B) by adding at the end thereof the following new sentence: The preceding sentence shall not apply to any loss of the distributing corporation (or the distributee) in the case of a distribution in complete liquidation." (10) Paragraph (1) of section 301(b) of the 1986 Code is amended to read as follows:
26 USC 337 note.
�
