Title 11 — BankruptcyRelease 119-73
§1231 Special tax provisions
Title 11 › Chapter CHAPTER 12— - ADJUSTMENT OF DEBTS OF A FAMILY FARMER OR FISHERMAN WITH REGULAR ANNUAL INCOME › Subchapter SUBCHAPTER II— - THE PLAN › § 1231
Summary
Confirmed bankruptcy plans that issue, transfer, or exchange securities or transfer papers cannot be taxed by a stamp tax or a similar tax. The court can let the person proposing the plan ask the government agency that handles income taxes to answer only legal questions about the plan’s tax effects, and if there is a real dispute the court can decide after the agency answers or 270 days, whichever comes first.
Full Legal Text
Title 11, §1231
Bankruptcy — Source: USLM XML via OLRC
(a)The issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under a plan confirmed under section 1225 of this title, may not be taxed under any law imposing a stamp tax or similar tax.
(b)The court may authorize the proponent of a plan to request a determination, limited to questions of law, by any governmental unit charged with responsibility for collection or determination of a tax on or measured by income, of the tax effects, under section 346 of this title and under the law imposing such tax, of the plan. In the event of an actual controversy, the court may declare such effects after the earlier of—
(1)the date on which such governmental unit responds to the request under this subsection; or
(2)270 days after such request.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification For repeal of section effective Oct. 1, 1998, and subsequent reenactment of section, see note set out preceding section 1201 of this title.
Amendments
2005—Subsec. (a). Pub. L. 109–8, § 719(b)(4), redesignated subsec. (c) as (a) and struck out former subsec. (a) which read as follows: “For the purpose of any State or local law imposing a tax on or measured by income, the taxable period of a debtor that is an individual shall terminate on the date of the order for relief under this chapter, unless the case was converted under section 706 of this title.” Subsec. (b). Pub. L. 109–8, § 1003(b), substituted “any governmental unit” for “a State or local governmental unit”. Pub. L. 109–8, § 719(b)(4), redesignated subsec. (d) as (b) and struck out former subsec. (b) which read as follows: “The trustee shall make a State or local tax return of income for the estate of an individual debtor in a case under this chapter for each taxable period after the order for relief under this chapter during which the case is pending.” Subsecs. (c), (d). Pub. L. 109–8, § 719(b)(4)(B), redesignated subsecs. (c) and (d) as (a) and (b), respectively.
Statutory Notes and Related Subsidiaries
Effective Date
of 2005 AmendmentAmendment by section 1003(b) of Pub. L. 109–8 effective Apr. 20, 2005, and not applicable with respect to cases commenced under this title before Apr. 20, 2005, see section 1003(c) of Pub. L. 109–8, set out as a note under section 1222 of this title. Amendment by section 719(b)(4) of Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such
Effective Date
, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title.
Effective Date
sPermanent reenactment of section effective July 1, 2005, see section 1001(a)(2) of Pub. L. 109–8, set out as a Repeal, Reenactment, and Termination of Chapter note under section 1201 of this title. For
Effective Date
s of section and
Amendments
extending periods for which section was reenacted prior to permanent reenactment, see
Effective Date
and
Effective Date
of 1999, 2001, 2002, 2003, and 2004 Amendment notes set out under section 1201 of this title.
Reference
Citations & Metadata
Citation
11 U.S.C. § 1231
Title 11 — Bankruptcy
Last Updated
Apr 6, 2026
Release point: 119-73