Page:United States Statutes at Large Volume 54 Part 1.djvu/1017

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54 STAT.] 76TH CONG., 3D SESS. -CH. 757-OCT. 8 , 1940 equal to the amount by which the aggregate of the amount of the money so received and of the adjusted basis, at the time of receipt, of all property (other than money) so received, exceeds the sum of: "(A) The aggregate of the adjusted basis of each share of stock with respect to which such property was received; such adjusted basis of each share to be determined immedi- ately prior to the receipt of any property in such liquidation with respect to such share, and "(B) The aggregate of the liabilities of such other corpo- ration assumed by the taxpayer in connection with the receipt of such property, of the liabilities (not assumed by the tax- payer) to which such property so received was subject, and of any other consideration (other than the stock with respect to which such property was received) given by the taxpayer for such property so received. "(b) REDUCTION IN EQUITY INVESTED CAPITAL.-The amount by which the equity invested capital for any day shall be reduced as pro- vided in subsection (a) shall be the sum of the following amounts- "(1) DIsTRIBUTIONs IN PREVIOUS YEARS.- Distributions made prior to such taxable year which were not out of accumulated earnings and profits; "(2) DlTRIBUTIoNs DURING THE YEAR.-D istributions previ- ously made during such taxable year which are not out of the earnings and profits of such taxable year; "(3) EARNINGS AND PROFITS OF ANOTHER CORPORATION.- The earnings and profits of another corporation which previously at any time were included in accumulated earnings and profits by reason of a transaction described in section 112 (b) to (e), both inclusive, or in the corresponding provision of a prior reve- nue law, or by reason of the transfer by such other corporation to the taxpayer of property the basis of which in the hands of the taxpayer is or was determined with reference to its basis in the hands of such other corporation, or would have been so deter- mined if the property had been other than money; and " (4) REDUCTION ON ACCOUNT OF LOSS ON TAX-FREE LIQUIDA- TION.- In the case of the previous receipt of property (other than property described in the last sentence of section 113 (a) (15)) by the taxpayer in complete liquidation of another corporation under section 112 (b) (6), or the corresponding provision of a prior revenue law, an amount, with respect to each such liquida- tion, equal to the amount by which the sum of- "(A) The aggregate of the adjusted basis of each share of stock with respect to which such property was received; such adjusted basis of each share to be determined immedi- ately prior to the receipt of any property in such liquidation with respect to such share, and "(B) The aggregate of the liabilities of such other cor- poration assumed by the taxpayer in connection with the receipt of such property, of the liabilities (not assumed by the taxpayer) to which such property so received was subject, and of any other consideration (other than the stock with respect to which such property was received) given by the taxpayer for such property so received, exceeds the aggregate of the amount of the money so received and of the adjusted basis, at the time of receipt, of all property (other than money) so received. The amount of the reduction under this paragraph shall not exceed the accumulated earnings and profits as of the beginning of such taxable year. 983 Reduction in equity invested capital. Distributions in pre- vious years. Distributions dur- ing the year. Earnings and prof- its of another corpora- tion. 53 Stat. 37-3 . 26 U. S. C., Supp. V. 112 (b)-(e). Loss on tax-free liq- uidation. 53 Stat. 43. 26 U. S. C., Supp. V, 1113 (a) (15). 53 Stat. 88. 2tU.S. ., Supp.V, 112 (b) (6). Limitation.