disqualified property

(1) No loss recognized in certain distributions to related persons (A) In general No loss shall be recognized to a liquidating corporation on the distribution of any property to a related person (within the meaning of section 267 ) if— (i) such distribution is not pro rata, or (ii) such property is disqualified prop­erty. (B) Disqualified property For purposes of subparagraph (A), the term “disqualified property” means any property which is acquired by the liquidating corporation in a transaction to which section 351 applied, or as a contribution to capital, during the 5-year period ending on the date of the distribution. Such term includes any property if the adjusted basis of such property is determined (in whole or in part) by reference to the adjusted basis of property described in the preceding sentence.

Source

26 USC § 336(d)(1)

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Scoping language

None identified, default scope is assumed to be the parent (subpart B) of this section.

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