§2148 — Title 12 Banks and Banking | U.S. Code

Summary

When cooperative banks merge, moving assets, taking on debts, swapping shares, or doing other steps needed to finish the merger are not taxed by the federal government, any State, or local government. If a cooperative gets assets or liabilities and then immediately uses the net distribution to buy stock in the merged bank, that exchange also is not taxed, but the stock's tax cost must be lowered by the amount of gain that was not taxed.

Title 12, §2148

Banks and Banking — Source: USLM XML via OLRC

The receipt of assets or assumption of liabilities by the consolidated bank, the exchange of stock, equities, or other ownership interests, and any other transaction carried out in accomplishing the merger of the banks for cooperatives shall not be treated as a taxable event under the laws of the United States or of any State or political subdivision thereof. The preceding sentence shall also apply to the receipt of assets and liabilities by a cooperative to the extent that the net amount of the distribution is immediately reinvested in stock of a consolidated bank (and in such case the basis of such stock shall be appropriately reduced by the amount of gain not recognized by reason of this sentence).

Notes & Related Subsidiaries

Editorial Notes

Amendments

1988—Pub. L. 100–399 substituted “cooperative” for “taxable institution”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 AmendmentAmendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.

§2148 Transactions to accomplish merger