For purposes of this subchapter, a distribution shall be treated as in complete liquidation of a corporation if the distribution is one of a series of distributions in redemption of all of the stock of the corporation pursuant to a plan.
(b) Transactions which might reach same result as partial liquidations
The Secretary shall prescribe such regulations as may be necessary to ensure that the purposes of subsections (a) and (b) ofsection
222 of the Tax Equity and Fiscal Responsibility Act of 1982 (which repeal the special tax treatment for partial liquidations) may not be circumvented through the use of section
351, or any other provision of law or regulations (including the consolidated return regulations).
Subsections (a) and (b) ofsection
222 of the Tax Equity and Fiscal Responsibility Act of 1982, referred to in subsec. (b), are subsecs. (a) and (b) ofPub. L. 97–248, title II, § 222,Sept. 3, 1982, 96 Stat. 478, which amended sections
336(a) of this title.
1982—Subsec. (a). Pub. L. 97–248substituted provision that a distribution shall be treated as in complete liquidation if the distribution is one of a series in redemption of all the stock pursuant to a plan for provision that a distribution was to be treated as in partial liquidation if the distribution was one of a series in redemption of all the stock pursuant to a plan, or the distribution was not essentially equivalent to a dividend, was in redemption of part of the stock pursuant to a plan, and occurred within the taxable year or the next taxable year of the plan being adopted, including but not limited to a distribution which met the requirements of former subsec. (b) of this section, and that for the purposes of sections
6043 of this title, a partial liquidation included a redemption of stock to which section
302 of this title applied.
Subsec. (b). Pub. L. 97–248added subsec. (b) and struck out former subsec. (b) which provided that a distribution was to be treated as in partial liquidation of a corporation if the distribution was attributable to the cessation of a business which had been carried on for the previous 5-year period and had not been acquired by the corporation in a transaction involving recognition of gain or loss during that time, and if the distributing corporation was actively involved in a trade or business immediately after the distribution under the terms described above for the business being liquidated, and that compliance with the above requirements would be determined without regard to whether or not the distribution was pro rata with respect to all the shareholders of the corporation.
Subsec. (c). Pub. L. 97–248struck out subsec. (c) which provided that the fact that, with respect to a shareholder, a distribution qualified under section
302(a) by reason of section
302(b) would not be taken into account in determining whether the distribution, with respect to such shareholder, was also a distribution in partial liquidation of the corporation.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after July 31, 1986, unless such corporation is completely liquidated before Jan. 1, 1987, any transaction described in section
338 of this title for which the acquisition date occurs after Dec. 31, 1986, and any distribution, not in complete liquidation, made after Dec. 31, 1986, with exceptions and special and transitional rules, see section 633 ofPub. L. 99–514, set out as an Effective Date note under section
336 of this title.
Effective Date of 1982 Amendment
Amendment by Pub. L. 97–248applicable to distributions after Aug. 31, 1982, with exceptions for certain partial liquidations, see section 222(f) ofPub. L. 97–248, set out as a note under section
302 of this title.
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
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