Page:United States Statutes at Large Volume 104 Part 2.djvu/869

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PUBLIC LAW 101-508—NOV. 5, 1990 104 STAT. 1388-461 "(1) IN GENERAL. — In the case of a disqualified distribution, any stock or securities in the controlled corporation shall not be treated as qualified property for purposes of subsection (c)(2) of this section or section 361(c)(2). "(2) DiSQUAUFiED DISTRIBUTION. —For purposes of this subsection, the term 'disqualified distribution' means any distribution to which this section (or so much of section 356 as relates to this section) applies if, immediately after the distribution— "(A) any person holds disqualified stock in the distributing corporation which constitutes a 50-percent or greater interest in such corporation, or "(B) any person holds disqualified stock in the controlled corporation (or, if stock of more than 1 controlled corporation is distributed, in any controlled corporation) which constitutes a 50-percent or greater interest in such corporation. "(3) DISQUALIFIED STOCK. —For purposes of this subsection, the term 'disqualified stock' means— "(A) any stock in the distributing corporation acquired by purchase after October 9, 1990, and during the 5-year period ending on the date of the distribution, and "(B) any stock in any controlled corporation— "(i) acquired by purchase after October 9, 1990, and during the 5-year period ending on the date of the distribution, or "(ii) received in the distribution to the extent attributable to distributions on— "(I) stock described in subparagraph (A), or "(II) any securities in the distributing corporation acquired by purchsise after October 9, 1990, and during the 5-year period ending on the date of the distribution. "(4) 50-PERCENT OR GREATER INTEREST.—For purpOSeS of this subsection, the term '50-percent or greater interest' means stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote or at least 50 percent of the total value of shares of all classes of stock. "(5) PURCHASE.—For purposes of this subsection— "(A) IN GENERAL.—Except as otherwise provided in this paragraph, the term 'purchase' means any acquisition but only if— "(i) the basis of the property acquired in the hands of the acquirer is not determined (I) in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or (II) under section 1014(a), and "(ii) the property is not acquired in an exchange to which section 351, 354, 355, or 356 applies. "(B) CERTAIN SECTION 351 EXCHANGES TREATED AS PUR- CHASES. —The term 'purchase' includes any acquisition of property in an exchange to which section 351 applies to the extent such property is acquired in exchange for— "(i) any cash or cash item, "(ii) any marketable stock or security, or "(iii) any debt of the transferor. "(C) CARRYOVER BASIS TRANSACTIONS. —I f —