(2) Limitation (A) Excess principal amount Paragraph (1) shall not apply if— (i) the principal amount of any such securities received exceeds the principal amount of any such securities surrendered, or (ii) any such securities are received and no such securities are surrendered. (B) Property attributable to accrued interest Neither paragraph (1) nor so much of section 356 as relates to paragraph (1) shall apply to the extent that any stock (including nonqualified preferred stock, as defined in section 351(g)(2)), securities, or other property received is attributable to interest which has accrued on securities on or after the beginning of the holder’s holding period. (C) Nonqualified preferred stock (i) In general Nonqualified preferred stock (as defined in section 351(g)(2) ) received in exchange for stock other than nonqualified preferred stock (as so defined) shall not be treated as stock or securities. (ii) Recapitalizations of family-owned corporations (I) In general Clause (i) shall not apply in the case of a recapitalization under section 368(a)(1)(E) of a family-owned corporation. (II) Family-owned corporation For purposes of this clause, except as provided in regulations, the term “family-owned corporation” means any corporation which is described in clause (i) of section 447(d)(2)(C) throughout the 8-year period beginning on the date which is 5 years before the date of the recapitalization. For purposes of the preceding sentence, stock shall not be treated as owned by a family member during any period described in section 355(d)(6)(B). (III) Extension of statute of limitations The statutory period for the assessment of any deficiency attributable to a corporation failing to be a family-owned corporation shall not expire before the expiration of 3 years after the date the Secretary is notified by the corporation (in such manner as the Secretary may prescribe) of such failure, and such deficiency may be assessed before the expiration of such 3-year period notwithstanding the provisions of any other law or rule of law which would otherwise prevent such assessment.
26 USC § 354(a)(2)
None identified, default scope is assumed to be the parent (subpart B) of this section.