PUBLIC LAW 94-455—OCT. 4, 1976
90 STAT. 1635
transfer ( and filed in such form and manner as may be prescribed by regulations by the Secretary), it is established to the satisfaction of the Secretary that such exchange is not in pursuance of a p l a n h a v i n g as one of its principal purposes the avoidance of Federal income taxes. "(2)
EXCEPTION FOR TRANSACTIONS DESIGNATED BY THE SECRE-
TARY.—Paragraph (1) shall not apply to any exchange (otherwise within paragraph (1)), or to any type of property, which the Secretary by regulations designates as not requiring the filing of a request. "(b)
OTHER TRANSFERS.— " (1) E F F E C To r SECTION TO BE DETERMINED UNDER REGULA-
TIONS.—In the case of any exchange described in section 332, 351, 354, 355, 356, or 361 in connection with which there is no transfer 26 USC 332, of property described in subsection (a)(1), a foreign corporation 351, 354, 355, shall be considered to be a corporation except to the extent pro- 356, 361. vided in regulations prescribed by the Secretary which are necessary or appropriate to prevent the avoidance of Federal income taxes. "(2)
REGULATIONS RELATING TO SALE OR EXCHANGE OF STOCK I N
FOREIGN CORPORATIONS.—The regulations prescribed pursuant to paragraph (1) shall include (but shall not be limited to) regulations dealing with the sale or exchange of stock or securities in a foreign corporation by a United States person, including regulations providing— " (A) the circumstances under which— " (i) gain shall be recognized currently, or amounts included in gross income currently as a dividend, or both, or " ( i i) gain or other amounts may be deferred for inclusion in the gross income of a shareliolder (or his successor in interest) at a later date, and " (B) the extent to which adjustments shall be made to earnings and profits, basis of stock or securities, and basis of assets. "(c)
TRANSACTIONS To B E TREATED AS E X C H A N G E S. —
" (1) SECTION 353 DISTRIBUTION.—For purposes of this section, any distribution described in section 355 (or so much of section 356 as relates to section 355) shall be treated as an exchange whether or not it is an exchange. "(2)
CONTRIBUTION OF CAPITAL TO CONTROLLED CORPORATIONS.—
For purposes of this chapter, any transfer of property to a foreign corporation as a contribution to the capital of such corporation by one or more persons who, immediately after the transfer, own (within the meaning of section 318) stock possessing at least 80 percent of the total combined voting power of all classes of stock of such corporation entitled to vote shall be treated as an exchange of such property for stock of the foreign corporation equal in value to the fair market value of the property transferred. " (d) TRANSITIONAL RULE. — I n the case of any exchange beginning before January 1, 1978— " (1) subsection (a) shall be applied without regard to whether or not there is a transfer of property described in subsection (a)(1), and " (2) subsection (b) shall not apply.".
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