H.R. 2604 (112th): To amend the Internal Revenue Code of 1986 to provide for the treatment of securities of a ...

...controlled corporation exchanged for assets in certain reorganizations.

112th Congress, 2011–2013. Text as of Jul 20, 2011 (Introduced).

Status & Summary | PDF | Source: GPO

I

112th CONGRESS

1st Session

H. R. 2604

IN THE HOUSE OF REPRESENTATIVES

July 20, 2011

(for herself, Mr. Welch, Mr. Kucinich, Mr. Michaud, Mr. Johnson of Georgia, Mr. Olver, Mr. Costello, Mrs. Napolitano, Ms. Pingree of Maine, Ms. Sutton, Mr. DeFazio, Ms. Kaptur, Mr. Walz of Minnesota, Mr. Tierney, Ms. Schakowsky, Ms. McCollum, and Mr. Rahall) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide for the treatment of securities of a controlled corporation exchanged for assets in certain reorganizations.

1.

Treatment of securities of a controlled corporation exchanged for assets in certain reorganizations

(a)

In general

Section 361 of the Internal Revenue Code of 1986 (relating to nonrecognition of gain or loss to corporations; treatment of distributions) is amended by adding at the end the following new subsection:

(d)

Special rules for transactions involving section 355 distributions

In the case of a reorganization described in section 368(a)(1)(D) with respect to which stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under section 355—

(1)

this section shall be applied by substituting stock other than nonqualified preferred stock (as defined in section 351(g)(2)) for stock or securities in subsections (a) and (b)(1), and

(2)

the first sentence of subsection (b)(3) shall apply only to the extent that the sum of the money and the fair market value of the other property transferred to such creditors does not exceed the adjusted bases of such assets transferred (reduced by the amount of the liabilities assumed (within the meaning of section 357(c))).

.

(b)

Conforming amendment

Paragraph (3) of section 361(b) of the Internal Revenue Code of 1986 is amended by striking the last sentence.

(c)

Effective date

The amendments made by this section shall apply to exchanges after the date of enactment of this Act.