Page:United States Statutes at Large Volume 72 Part 1.djvu/1659

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[72 Stat. 1617]
PUBLIC LAW 85-000—MMMM. DD, 1958
[72 Stat. 1617]

72 S T A T. ]

PUBLIC LAW 86-866--SEPT. 2, 1958

graph (1)(B) (other than assets described in subparagraph (A) of this paragraph), plus " (C) if the shareholder owns more than 20 percent in value of the outstanding stock of the corporation and owns, or at any time during the preceding 3-year period owned, more than 20 percent in value of the outstanding stock of any other corporation more than 70 percent in value of the assets of which are, or were at any time during which such shareholder owned during such 8-year period more than 20 percent in value of the outstanding stock, assets similar or related in service or use to assets comprising more than 70 percent in value of the assets of the corporation, the net unrealized appreciation in assets of the corporation described in paragraph (1)(C) (other than assets described in subparagraph (A) of this paragraph), does not exceed an amount equal to 15 percent of the net worth of the corporation. "(3) RECOGNITION OF GAIN IN CERTAIN LIQUIDATIONS.—For purposes of section 333, a corporation shall not be considered to be a collapsible corporation if at all times after the adoption of the plan of liquidation, the net unrealized appreciation in subsection (e) assets of the corporation (as defined m paragraph (5)(B)) does not exceed an amount equal to 15 percent of the net worth of the corporation. " (4)

26 USC 333.

G A I N OR LOSS ON SALES OR EXCHANGES IN CONNECTION WITH

CERTAIN LIQUIDATIONS.—FoT purposes of section 337, a" corporation shall not be considered to be a collapsible corporation with respect to any sale or exchange by it of property within the 12month period beginning on the date of the adoption of a plan of complete liquidation, if— " (A) at all times after the adoption of such plan, the net unrealized appreciation in subsection (e) assets of the corporation (as defined in paragraph (5)(A)) does not exceed an amount equal to 15 percent of the net worth of the corporation, " (B) within the 12-month period beginning on the date of the adoption of such plan, the corporation sells substantially all of the properties held by it on such date, and " (C) following the adoption of such plan, no distribution is made of any property which in the hands of the corporation or in the hands of the distributee is property in respect of which a deduction for exhaustion, wear and tear, obsolescence, amortization, or depletion is allowable. This paragraph shall not apply with respect to any sale or exchange of property by the corporation to any shareholder who owns more than 20 percent in value of the outstanding stock of the corporation or to any person related to such shareholder (within the meaning of paragraph (8)), if such property in the hands of the corporation or in the hands of such shareholder or related person is property in respect of which a deduction for exhaustion, wear and tear, obsolescence, amortization, or depletion is allowable. "(5)

1617

SUBSECTION (e) ASSET DEFINED.—

" (A) For purposes of paragraphs (1), (2), and (4), the term 'subsection (e) asset^ means, with respect to property held by any corporation— " (i) property (except property used in the trade or business, as defined in paragraph (9)) which in the hands of the corporation is, or, in the hands of a share-

26 USC 337.