PUBLIC LAW 94-455—OCT. 4, 1976
90 STAT. 1603
may be, shall be treated as the loss corporation (whether or not such corporation is a loss corporation). The reduction, if any, so determined under paragraph (2) shall be applied to the losses of such controlled corporation. " (B) TRIANGULAR REORGANIZATIONS.—Except as otherwise provided in paragraph (5), if the shareholders of the loss corporation (immediately before the reorganization) own, as a result of the reorganization, stock in a corporation controlling the acquiring corporation, such shareholders shall be treated as owning (immediately after the reorganization) a percentage of the total fair market value of the participating stock and of all the stock of the acquiring corporation owned by the controlling corporation equal to the percentage of the total fair market value of the participating stock and of all the stock, respectively, of the controlling corporation owned by such shareholders. " (4) SPECIAL RULES.—For purposes of applying paragraph (1)(B)"(A)
CERTAIN RELATED TRANSACTIONS.—If,
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immediately
before the reorganization— " (i) one or more shareholders of the loss corporation own stock of such corporation which such shareholder acquired during the 36-month period ending on the date of the acquisition in a transaction described in paragraph (1) or in subsection (a)(1)(C) (unless excepted by subsection (a)(5)), and " ( i i) such shareholders own more than 50 percent of the total fair market value of the stock of another corporation a party to the reorganization, or any such shareholder is a corporation controlled by another corporation a party to the reorganization, then such shareholders shall not be treated as shareholders of the loss corporation with respect to such stock. " (B) CERTAIN PRIOR OWNERSHIP or LOSS CORPORATION.—If,
immediately before the reorganization, the acquiring or acquired corporation owns stock of the loss corporation, then paragraph (1)(B) shall be applied by treating the shareholders of the loss corporation as owning an additional amount of the total fair market value of the participating stock and of all the stock of the acquiring corporation, as a ^ result of owning stock in the loss corporation, equal to the total fair market value of the participating stock and of all the stock, respectively, of the loss corporation owned (immediately before the reorganization) by the acquiring or acquired corporation. This subparagraph shall not apply to stock of the loss corporation owned by the acquiring or acquired corporation if such stock was acquired by such corporation within the 36-month period ending on the date of the reorganization in a transaction described in subsection (a)(1)(C) (unless excepted by subsection (a)(5)); or to a reorganization described in section 368(a)(1)(B) or (C) to the extent the 26 USC 368. acquired corporation does not distribute the stock received by it to its own shareholders. "(C)
CERTAIN ASSET ACQUISITIONS.—If a loss corporation
receives stock of the acquiring corporation in a reorganization described in section 3 6 8 (a)(1)(C) and does not distribute such stock to its shareholders, paragraph (1)(B) shall be
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