[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2604 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 2604

To amend the Internal Revenue Code of 1986 to provide for the treatment 
   of securities of a controlled corporation exchanged for assets in 
                        certain reorganizations.


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                    IN THE HOUSE OF REPRESENTATIVES

                             July 20, 2011

 Ms. Slaughter (for herself, Mr. Welch, Mr. Kucinich, Mr. Michaud, Mr. 
   Johnson of Georgia, Mr. Olver, Mr. Costello, Mrs. Napolitano, Ms. 
  Pingree of Maine, Ms. Sutton, Mr. DeFazio, Ms. Kaptur, Mr. Walz of 
 Minnesota, Mr. Tierney, Ms. Schakowsky, Ms. McCollum, and Mr. Rahall) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide for the treatment 
   of securities of a controlled corporation exchanged for assets in 
                        certain reorganizations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TREATMENT OF SECURITIES OF A CONTROLLED CORPORATION 
              EXCHANGED FOR ASSETS IN CERTAIN REORGANIZATIONS.

    (a) In General.--Section 361 of the Internal Revenue Code of 1986 
(relating to nonrecognition of gain or loss to corporations; treatment 
of distributions) is amended by adding at the end the following new 
subsection:
    ``(d) Special Rules for Transactions Involving Section 355 
Distributions.--In the case of a reorganization described in section 
368(a)(1)(D) with respect to which stock or securities of the 
corporation to which the assets are transferred are distributed in a 
transaction which qualifies under section 355--
            ``(1) this section shall be applied by substituting `stock 
        other than nonqualified preferred stock (as defined in section 
        351(g)(2))' for `stock or securities' in subsections (a) and 
        (b)(1), and
            ``(2) the first sentence of subsection (b)(3) shall apply 
        only to the extent that the sum of the money and the fair 
        market value of the other property transferred to such 
        creditors does not exceed the adjusted bases of such assets 
        transferred (reduced by the amount of the liabilities assumed 
        (within the meaning of section 357(c))).''.
    (b) Conforming Amendment.--Paragraph (3) of section 361(b) of the 
Internal Revenue Code of 1986 is amended by striking the last sentence.
    (c) Effective Date.--The amendments made by this section shall 
apply to exchanges after the date of enactment of this Act.
                                 <all>