26 U.S. Code § 997. Special subchapter C rules

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For purposes of applying the provisions of subchapter C of chapter 1, any distribution in property to a corporation by a DISC or former DISC which is made out of previously taxed income or accumulated DISC income shall—
(1)
be treated as a distribution in the same amount as if such distribution of property were made to an individual, and
(2)
have a basis, in the hands of the recipient corporation, equal to the amount determined under paragraph (1).