§311 Taxability of corporation on distribution

1988—Subsec. (a). Pub. L. 100–647, § 1018(d)(5)(E), substituted “distribution (not in complete liquidation) with respect to its stock” for “distribution, with respect to its stock,”. Subsec. (b)(2). Pub. L. 100–647, § 1006(e)(21)(B), substituted “liabilities” for “liabilities in excess of basis” in heading. Subsec. (b)(3). Pub. L. 100–647, § 1006(e)(8)(B), added par. (3). 1986—Pub. L. 99–514 amended section generally, substituting provisions relating to distributions of appreciated property for provisions relating to LIFO inventory, liability in excess of basis, and appreciated property used to redeem stock. 1984—Subsec. (d). Pub. L. 98–369, § 54(a)(3), substituted “Distributions of appreciated property” for “Appreciated property used to redeem stock” in heading. Subsec. (d)(1). Pub. L. 98–369, § 54(a)(1), substituted “This subsection shall be applied after the applications of subsections (b) and (c)” for “Subsections (b) and (c) shall not apply to any distribution to which this subsection applies” in provisions following subpar. (B). Subsec. (d)(1)(A). Pub. L. 98–369, § 54(a)(1), struck out “of part or all of his stock in such corporation” before “and”. Subsec. (d)(2)(A). Pub. L. 98–369, § 54(a)(2)(A), substituted provisions relating to a distribution which is made with respect to qualified stock if section 302(b)(4) applies to such distribution or such distribution is a qualified distribution for provisions which had related to a distribution to a corporate shareholder if the basis of the property distributed was determined under section 301(d)(2). Subsec. (d)(2)(B) to (F). Pub. L. 98–369, § 54(a)(2)(A), (B), redesignated subpars. (C) to (F) as (B) to (E), respectively, and struck out former subpar. (B) which related to distributions to which section 302(b)(4) applied and which were made with respect to qualified stock. Subsec. (e)(1)(C). Pub. L. 98–369, § 712(j), added subpar. (C). Subsec. (e)(3). Pub. L. 98–369, § 54(a)(2)(C), added par. (3). 1982—Subsec. (d)(2)(A). Pub. L. 97–248, § 223(a)(1), substituted reference to a distribution to a corporate shareholder if the basis of the property distributed is determined under section 301(d)(2) for reference to a distribution in complete redemption of all of the stock of a shareholder who, at all times within the 12-month period ending on the date of such distribution owned at least 10 percent in value of the outstanding stock of the distributing corporation, but only if the redemption qualified under section 302(b)(3) (determined without the application of section 302(c)(2)(A)(ii)). Subsec. (d)(2)(B). Pub. L. 97–248, § 223(a)(1), substituted reference to a distribution to which section 302(b)(4) applies and which is made with respect to qualified stock for reference to a distribution of stock or an obligation of a corporation, which was engaged in at least one trade or business, which had not received property constituting a substantial part of its assets from the distributing corporation, in a transaction to which section 351 applied or as a contribution to capital, within the 5-year period ending on the date of the distribution, and at least 50 percent in value of the outstanding stock of which was owned by the distributing corporation at any time within the 9-year period ending one year before the date of the distribution. Subsec. (d)(2)(C). Pub. L. 97–248, § 223(a)(1), substituted reference to a distribution of stock or an obligation of a corporation if the requirements of subsec. (e)(2) of this section are met with respect to the distribution for reference to a distribution of stock or securities pursuant to the terms of a final judgment rendered by a court with respect to the distributing corporation in a court proceeding under the Sherman Act (15 U.S.C. 1–7) or the Clayton Act (15 U.S.C. 12–27), or both, to which the United States was a party, but only if the distribution of such stock or securities in redemption of the distributing corporation’s stock was in furtherance of the purposes of the judgment. Subsec. (d)(2)(G). Pub. L. 97–248, § 223(a)(3), struck out subpar. (G) which provided that a distribution of stock to a distributee which is not an organization exempt from tax under section 501(a) of this title, if with respect to such distributee, subsec. (a)(1) or (b)(1) of section 1101 of this title applied to such distribution. Subsec. (e). Pub. L. 97–248, § 223(a)(2), added subsec. (e). 1980—Subsec. (a). Pub. L. 96–471 substituted “section 453B” for “section 453(d)”. 1978—Subsec. (d)(2)(G), (H). Pub. L. 95–600 redesignated subpar. (H) as (G). 1976—Subsec. (d)(1)(B). Pub. L. 94–455, § 1901(a) (42)(A), substituted “then a gain shall be recognized” for “then again shall be recognized”. Subsec. (d)(2). Pub. L. 94–452 and Pub. L. 94–455 § 1901(a)(42)(B)(i), (C), struck out subpar. (C) relating to certain distributions before Dec. 1, 1974, struck out “26 Stat. 209;” before “15 U.S.C. 1–7)” and “38 Stat. 730;” before “15 U.S.C. 12–27)” in subpar. (D), added subpar. (H), and redesignated subpars. (D) to (G), as so amended, as subpars. (C) to (F), respectively. 1969—Subsec. (a). Pub. L. 91–172, § 905(b)(1), inserted reference to subsec. (d). Subsec. (d). Pub. L. 91–172, § 905(a), added subsec. (d).

of 1988 AmendmentAmendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

of 1986 AmendmentAmendment by Pub. L. 99–514 applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after July 31, 1986, unless such corporation is completely liquidated before Jan. 1, 1987, any transaction described in section 338 of this title for which the acquisition date occurs after Dec. 31, 1986, and any distribution, not in complete liquidation, made after Dec. 31, 1986, with exceptions and special and transitional rules, see section 633 of Pub. L. 99–514, set out as an

note under section 336 of this title.

of 1984 Amendment Pub. L. 98–369, div. A, title I, § 54(d), July 18, 1984, 98 Stat. 569, as amended by Pub. L. 99–514, § 2, title XVIII, § 1804(b)(3), Oct. 22, 1986, 100 Stat. 2095, 2799; Pub. L. 100–647, title I, § 1018(d)(1)–(3), Nov. 10, 1988, 102 Stat. 3578, provided that: “(1) Subsection (a).—Except as otherwise provided in this subsection, the

made by subsection (a) shall not apply to any distribution before January 1, 1985, to an 80-percent corporate shareholder if the basis of the property distributed is determined under section 301(d)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. “(B) 80-percent corporate shareholder.—The term ‘80-percent corporate shareholder’ means, with respect to any distribution, any corporation which owns—“(i) stock in the corporation making the distribution possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote, and “(ii) at least 80 percent of the total number of shares of all other classes of stock of the distributing corporation (except nonvoting stock which is limited and preferred as to dividends). “(C) Special rule for affiliated group filing consolidated return.—For purposes of this paragraph and paragraph (4), all members of the same affiliated group (as defined in section 1504 of the Internal Revenue Code of 1986) which file a consolidated return for the taxable year which includes the date of the distribution shall be treated as 1 corporation. “(D) Special rule for certain distributions before january 1, 1988.—“(i) In general.—In the case of a transaction to which this subparagraph applies, subparagraph (A) shall be applied by substituting ‘1988’ for ‘1985’ and the

of 1982 Amendment; Exceptions Pub. L. 97–248, title II, § 223(b), Sept. 3, 1982, 96 Stat. 484, as amended by Pub. L. 97–448, title III, § 306(a)(7), Jan. 12, 1983, 96 Stat. 2402; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “(1) In general.—Except as otherwise provided in this subsection, the

made by this section [amending this section] shall apply to distributions after August 31, 1982. “(2) Distributions pursuant to ruling requests before july 23, 1982.—In the case of a ruling request under section 311(d)(2)(A) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect before the

made by this section) made before July 23, 1982, the

made by this section [amending this section] shall not apply to distributions made—“(A) pursuant to a ruling granted pursuant to such request, and “(B) either before October 21, 1982, or within 90 days after the date of such ruling. “(3) Distributions pursuant to final judgments of court.—In the case of a final judgment described in section 311(d)(2)(C) of such Code (as in effect before the

made by this section) rendered before July 23, 1982, the

made by this section [amending this section] shall not apply to distributions made before January 1, 1986, pursuant to such judgment. “(4) Certain distributions with respect to stock acquired before may 1982.—The

made by this section [amending this section] shall not apply to distributions—“(A) which meet the requirements of section 311(d)(2)(A) of such Code (as in effect on the day before the date of the enactment of this Act [Sept. 3, 1982]), “(B) which are made on or before August 31, 1983, and “(C) which are made with respect to stock acquired after 1980 and before May 1982. “(5) Distributions of timberland with respect to stock of forest products company.—If—“(A) a forest products company distributes timberland to a shareholder in redemption of the common and preferred stock in such corporation held by such shareholder, “(B) section 311(d)(2)(A) of the Internal Revenue Code of 1986 (as in effect before the

of 1980 AmendmentFor

of amendment by Pub. L. 96–471, see section 6(a)(1) of Pub. L. 96–471, set out as an

note under section 453 of this title.

of 1978 Amendment Pub. L. 95–600, title VII, § 703(j)(2)(C), Nov. 6, 1978, 92 Stat. 2941, provided that: “The

made by this paragraph [amending this section] shall take effect as if included in section 2(b) of the Bank Holding Company Tax Act of 1976 [amending this section].”

of 1976 AmendmentAmendment by section 1901(a)(42)(A), (C) of Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title. Pub. L. 94–455, title XIX, § 1901(a)(42)(B)(ii), Oct. 4, 1976, 90 Stat. 1771, provided that: “The

of 1969 Amendment Pub. L. 91–172, title IX, § 905(c), Dec. 30, 1969, 83 Stat. 714, as amended by Pub. L. 91–675, Jan. 12, 1971, 84 Stat. 2059, provided that: “(1) Except as provided in paragraphs (2), (3), (4), and (5), the

made by subsections (a) and (b) [amending this section and section 301 and 312 of this title] shall apply with respect to distributions after November 30, 1969. “(2) The