qualified corporation
(6) Exception where stock held during entire existence of corporation (A) In general Subsection (a) shall not apply to any extraordinary dividend with respect to any share of stock of a corporation if— (i) such stock was held by the taxpayer during the entire period such corporation was in existence, and (ii) except as provided in regulations, no earnings and profits of such corporation were attributable to transfers of property from (or earnings and profits of) a corporation which is not a qualified corporation. (B) Qualified corporation For purposes of subparagraph (A), the term “qualified corporation” means any corporation (including a predecessor corporation)— (i) with respect to which the taxpayer holds directly or indirectly during the entire period of such corporation’s existence at least the same ownership interest as the taxpayer holds in the corporation distributing the extraordinary dividend, and (ii) which has no earnings and profits— (I) which were earned by, or (II) which are attributable to gain on property which accrued during a period the corporation holding the property was, a corporation not described in clause (i). (C) Application of paragraph This paragraph shall not apply to any extraordinary dividend to the extent such application is inconsistent with the purposes of this section.