§ 362. Basis to corporations

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1954

   Aug. 16, 1954, ch. 736, 68A Stat. 118 · 68A Stat. 118

   Enacted · 26 U.S.C. § 362

   Aug. 16, 1954, ch. 736, 68A Stat. 118

   Source evidence

   Code source credit
   Aug. 16, 1954, ch. 736, 68A Stat. 118

2. 1968

   Pub. L. 90–621 § 2(b) · 82 Stat. 1310

   Substituted · 26 U.S.C. § 362(b)

   Pub. L. 90–621 substituted the exchange of stock or securities of the transferee (or of a corporation which is in control of the transferee) for the issuance of stock or securities of the transferee as the transaction rendering the subsection applicable

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 90–621 substituted the exchange of stock or securities of the transferee (or of a corporation which is in control of the transferee) for the issuance of stock or securities of the transferee as the transaction rendering the subsection applicable.

   Enacted provision · exact public law section
   (b) The last sentence of section 362(b) of such Code (relating to Property transfers to corporations, nonapplicability. 68A Stat. 119. basis of property transferred to corporations in corporate reorganizations) is amended to read as follows: “This subsection shall not apply if the property acquired consists of stock or securities in a corporation a party to the reorganization, unless acquired by the exchange of stock or securities of the transferee (or of a corporation which is in control of the transferee) as the consideration in whole or in part for the transfer.”

3. 1976

   Pub. L. 94–455 § 1906(b)(13)(A) · 90 Stat. 1520

   Struck · 26 U.S.C. § 362(c)(2)(B)

   Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”

   Source evidence

   Code amendment note
   Subsec. (c)(2)(B). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.

   Enacted provision · exact public law section
   (A) The Internal Revenue Code of 1954, as amended by this Act, is amended by striking out “Secretary or his delegate” each place it appears and inserting in lieu thereof “Secretary”.

4. 1976

   Pub. L. 94–455 § 2120(b) · 90 Stat. 1520

   Added · 26 U.S.C. § 362(c)(3)

   Pub. L. 94–455, § 2120(b), added par. (3)

   Source evidence

   Code amendment note
   Subsec. (c)(3). Pub. L. 94–455, § 2120(b), added par. (3).

   Enacted provision · exact public law section
   (b) Conforming Amendment.— Section 362(c) (relating to special 26 USC 362. rule for contributions to capital) is amended by adding the following new paragraph immediately after paragraph (2): “(3) Exception for contributions in aid of construction.— The provisions of this subsection shall not apply to contributions in aid of construction to which section 118(b) applies.” Ante, p. 1912. 26 USC 118 note.

5. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 title VIII § 824(b) · 100 Stat. 2085

   Struck · 26 U.S.C. § 362(c)(3)

   Pub. L. 99–514 struck out par. (3) relating to exceptions for contributions in aid of construction

   Source evidence

   Code amendment note
   Subsec. (c)(3). Pub. L. 99–514 struck out par. (3) relating to exceptions for contributions in aid of construction.

   Enacted provision · exact public law section
   (b) Technical Amendment.— Subsection (c) of section 362 (relating to special rules for certain contributions to capital) is amended by striking out paragraph (3).

6. 1999

   Miscellaneous Trade and Technical Corrections Act of 1999

   Pub. L. 106–36 title III § 3001(b)(2) · 113 Stat. 127

   Added · 26 U.S.C. § 362(d)

   Pub. L. 106–36 added subsec. (d)

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 106–36 added subsec. (d).

   Enacted provision · exact public law section
   (2) Limitation on basis increase attributable to assumption of liability.— Section 362 of such Code is amended 26 USC 362. by adding at the end the following new subsection: “(d) Limitation on Basis Increase Attributable To Assumption of Liability.— “(1) In general.— In no event shall the basis of any property be increased under subsection (a) or (b) above the fair market value of such property (determined without regard to section 7701(g)) by reason of any gain recognized to the transferor assumption of a liability. “(2) Treatment of gain not subject to tax.— Except as provided in regulations, if— “(A) gain is recognized to the transferor as a result of an assumption of a nonrecourse liability by a transferee which is also secured by assets not transferred to such transferee; and “(B) no person is subject to tax under this title on such gain, then, for purposes of determining basis under subsections (a) and (b), the amount of gain recognized by the transferor as a result of the assumption of the liability shall be determined as if the liability assumed by the transferee equaled such transferee’s ratable portion of such liability determined on the basis of the relative fair market values (determined without regard to section 7701(g)) of all of the assets subject to such liability.”.

7. 2004

   Pub. L. 108–357 title VIII § 836(a) · 118 Stat. 1418

   Added · 26 U.S.C. § 362(e)

   Pub. L. 108–357 added subsec. (e)

   Source evidence

   Code amendment note
   Subsec. (e). Pub. L. 108–357 added subsec. (e).

   Enacted provision · exact public law section
   (a) In General.— Section 362 (relating to basis to corporations) is amended by adding at the end the following new subsection: “(e) Limitations on Built-In Losses.— “(1) Limitation on importation of built-in losses.— “(A) In general.— If in any transaction described in subsection (a) or (b) there would (but for this subsection) be an importation of a net built-in loss, the basis of each property described in subparagraph (B) which is acquired in such transaction shall (notwithstanding subsections (a) and (b)) be its fair market value immediately after such transaction. “(B) Property described.— For purposes of subparagraph (A), property is described in this subparagraph if— “(i) gain or loss with respect to such property is not subject to tax under this subtitle in the hands of the transferor immediately before the transfer, and “(ii) gain or loss with respect to such property is subject to such tax in the hands of the transferee immediately after such transfer. In any case in which the transferor is a partnership, the preceding sentence shall be applied by treating each partner in such partnership as holding such partner’s proportionate share of the property of such partnership. “(C) Importation of net built-in loss.— For purposes of subparagraph (A), there is an importation of a net built-in loss in a transaction if the transferee’s aggregate adjusted bases of property described in subparagraph (B) which is transferred in such transaction would (but for this paragraph) exceed the fair market value of such property immediately after such transaction. “(2) Limitation on transfer of built-in losses in section 351 transactions.— “(A) In general.— If— “(i) property is transferred by a transferor in any transaction which is described in subsection (a) and which is not described in paragraph (1) of this subsection, and “(ii) the transferee’s aggregate adjusted bases of such property so transferred would (but for this paragraph) exceed the fair market value of such property immediately after such transaction, then, notwithstanding subsection (a), the transferee’s aggregate adjusted bases of the property so transferred shall not exceed the fair market value of such property immediately after such transaction. “(B) Allocation of basis reduction.— The aggregate reduction in basis by reason of subparagraph (A) shall be allocated among the property so transferred in proportion to their respective built-in losses immediately before the transaction. “(C) Election to apply limitation to transferor’s stock basis.— “(i) In general.— If the transferor and transferee of a transaction described in subparagraph (A) both elect the application of this subparagraph— “(I) subparagraph (A) shall not apply, and “(II) the transferor’s basis in the stock received for property to which subparagraph (A) does not apply by reason of the election shall not exceed its fair market value immediately after the transfer. “(ii) Election.— An election under clause (i) shall be included with the return of tax for the taxable year in which the transaction occurred, shall be in such form and manner as the Secretary may prescribe, and, once made, shall be irrevocable.” .

8. 2005

   Tax Technical Corrections Act of 2005

   Pub. L. 109–135 title IV § 403(dd)(2) · 119 Stat. 2577

   Amended · 26 U.S.C. § 362(e)(2)(C)(ii)

   Pub. L. 109–135 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “An election under clause (i) shall be included with the return of tax for the taxable year in which the transaction occurred, shall be in such form and manner as the Secretary may prescribe, and, once made, shall be irrevocable.”

   Source evidence

   Code amendment note
   Subsec. (e)(2)(C)(ii). Pub. L. 109–135 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “An election under clause (i) shall be included with the return of tax for the taxable year in which the transaction occurred, shall be in such form and manner as the Secretary may prescribe, and, once made, shall be irrevocable.”

   Enacted provision · exact public law section
   (2) Clause (ii) of section 362(e)(2)(C) is 26 USC 362. amended to read as follows: “(ii) Election.— Any election under clause (i) shall be made at such time and in such form and manner as the Secretary may prescribe, and, once made, shall be irrevocable.” .

9. 2014

   Tax Technical Corrections Act of 2014

   Pub. L. 113–295 div. A title II § 221(a)(51) · 128 Stat. 4010

   Struck · 26 U.S.C. § 362(a)

   Pub. L. 113–295 struck out “on or after June 22, 1954” after “If property was acquired” in introductory provisions

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 113–295 struck out “on or after June 22, 1954” after “If property was acquired” in introductory provisions.

   Enacted provision · exact public law section
   (51) Basis to corporations.— Section 362 is amended by striking “on or after June 22, 1954” in subsection (a) and by striking “, on or after June 22, 1954,” each place it appears in subsection (c).

   Effective date note
   Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.

10. 2014

    Tax Technical Corrections Act of 2014

    Pub. L. 113–295 div. A title II § 221(a)(51) · 128 Stat. 4010

    Struck · 26 U.S.C. § 362(c)(1)(A); 26 U.S.C. § 362(c)(2)(A)

    Pub. L. 113–295 struck out “, on or after June 22, 1954,” after “by a corporation”

    Source evidence

    Code amendment note
    Subsec. (c)(1)(A), (2)(A). Pub. L. 113–295 struck out “, on or after June 22, 1954,” after “by a corporation”.

    Enacted provision · exact public law section
    (51) Basis to corporations.— Section 362 is amended by striking “on or after June 22, 1954” in subsection (a) and by striking “, on or after June 22, 1954,” each place it appears in subsection (c).

    Effective date note
    Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.

11. 2018

    Energy and Water Development and Related Agencies Appropriations Act, 2018

    Pub. L. 115–141 div. U title IV § 401(a)(67) · 132 Stat. 348

    Struck · 26 U.S.C. § 362(a)

    Pub. L. 115–141 struck out comma after “acquired” in introductory provisions

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 115–141 struck out comma after “acquired” in introductory provisions.

    Enacted provision · exact public law section
    Sec. 401. The Nuclear Regulatory Commission shall comply with the July 5, 2011, version of Chapter VI of its Internal Commission Procedures when responding to Congressional requests for information.

10 of 11 references resolved to an enrolled provision · 1 partial