There is hereby imposed on any person who receives greenmail a tax equal to 50 percent of gain or other income of such person by reason of such receipt.
For purposes of this section, the term “greenmail” means any consideration transferred by a corporation (or any person acting in concert with such corporation) to directly or indirectly acquire stock of such corporation from any shareholder if—
(1)such shareholder held such stock (as determined under section
1223) for less than 2 years before entering into the agreement to make the transfer,
(2)at some time during the 2-year period ending on the date of such acquisition—
(B)any person acting in concert with such shareholder, or
(C)any person who is related to such shareholder or person described in subparagraph (B),
made or threatened to make a public tender offer for stock of such corporation, and
(3)such acquisition is pursuant to an offer which was not made on the same terms to all shareholders.
For purposes of the preceding sentence, payments made in connection with, or in transactions related to, an acquisition shall be treated as paid in such acquisition.
(c) Other definitions
For purposes of this section—
(1) Public tender offer
The term “public tender offer” means any offer to purchase or otherwise acquire stock or assets in a corporation if such offer was or would be required to be filed or registered with any Federal or State agency regulating securities.
(2) Related person
A person is related to another person if the relationship between such persons would result in the disallowance of losses under section
(d) Tax applies whether or not amount recognized
The tax imposed by this section shall apply whether or not the gain or other income referred to in subsection (a) is recognized.
(e) Administrative provisions
For purposes of the deficiency procedures of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A.
1988—Subsec. (a). Pub. L. 100–647, § 2004(o)(1)(A), substituted “gain or other income of such person by reason of such receipt” for “gain realized by such person on such receipt”.
Subsec. (b). Pub. L. 100–647, § 2004(o)(1)(B)(i), substituted “a corporation (or any person acting in concert with such corporation) to directly or indirectly acquire stock of such corporation” for “a corporation to directly or indirectly acquire its stock”.
Subsec. (d). Pub. L. 100–647, § 2004(o)(1)(C), substituted “amount” for “gain” in heading and inserted “or other income” after “the gain” in text.
Amendment by section 2004(o)(1)(A), (C), (2) ofPub. L. 100–647effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987, Pub. L. 100–203, title X, to which such amendment relates, see section 2004(u) ofPub. L. 100–647, set out as a note under section
56 of this title.
Section 2004(o)(1)(B)(ii) ofPub. L. 100–647provided that: “The amendment made by clause (i) [amending this section] shall apply to transactions occurring on or after March 31, 1988.”
Section 10228(d) ofPub. L. 100–203provided that: “The amendments made by this section [enacting this chapter and amending section
275 of this title] shall apply to consideration received after the date of the enactment of this Act [Dec. 22, 1987] in taxable years ending after such date; except that such amendments shall not apply in the case of any acquisition pursuant to a written binding contract in effect on December 15, 1987, and at all times thereafter before the acquisition.”
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
An empty table indicates that we see no relevant changes listed in the classification tables. If you suspect that our system may be missing something, please double-check with the Office of the Law Revision Counsel.
Description of Change
Statutes at Large
LII has no control over and does not endorse any external Internet site that contains links to or references LII.