§ 368. Definitions relating to corporate reorganizations

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. 120 · 68A Stat. 120

   Enacted · 26 U.S.C. § 368

   Aug. 16, 1954, ch. 736, 68A Stat. 120

   Source evidence

   Code source credit
   Aug. 16, 1954, ch. 736, 68A Stat. 120

2. 1964

   Revenue Act of 1964

   Pub. L. 88–272 § 218(a) · 78 Stat. 19

   1. Inserted · 26 U.S.C. § 368(a)

      Pub. L. 88–272, § 218(a), (b)(1), inserted “(or in exchange solely for all or a part of the voting stock of a corporation which is in control of the acquiring corporation)” in par. (1)(B), and in par. (2)(C)

   2. Inserted · 26 U.S.C. § 368(a)

      Pub. L. 88–272, § 218(a), (b)(1), inserted references to par. (1)(B)

   3. Substituted · 26 U.S.C. § 368(a)

      Pub. L. 88–272, § 218(a), (b)(1), substituted “assets or stock” for “assets” wherever appearing

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 88–272, § 218(a), (b)(1), inserted “(or in exchange solely for all or a part of the voting stock of a corporation which is in control of the acquiring corporation)” in par. (1)(B), and in par. (2)(C), inserted references to par. (1)(B), and substituted “assets or stock” for “assets” wherever appearing.

   Enacted provision · exact public law section
   (a) Definition of Reorganization.— Section 368(a)(1) (relating 26 USC 368. to definition of reorganization) is amended by inserting after “voting stock” in subparagraph (B) “(or in exchange solely for all or a part of the voting stock of a corporation which is in control of the requiring corporation)”.

3. 1964

   Revenue Act of 1964

   Pub. L. 88–272 § 218(b)(2) · 78 Stat. 19

   Inserted · 26 U.S.C. § 368(b)

   Pub. L. 88–272, § 218(b)(2), inserted references to par. (1)(B) wherever appearing

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 88–272, § 218(b)(2), inserted references to par. (1)(B) wherever appearing.

   Enacted provision · exact public law section
   (2) Section 368(b) (relating to definition of party to a reorganization) is amended by striking out the last two sentences and inserting in lieu thereof the following: “In the case of a reorganization qualifying under paragraph (1)(B) or (1)(C) of subsection (a), if the stock exchanged for the stock or properties is stock of a corporation which is in control of the acquiring corporation, the term ‘a party to a reorganization’ includes the corporation so controlling the acquiring corporation. In the case of a reorganization qualifying under paragraph (1) (A), (1) (B), or (1)(C) of subsection (a) by reason of paragraph (2) (C) of subsection (a), the term ‘a party to a reorganization’ includes the corporation controlling the corporation to which the acquired assets or stock are transferred.”

4. 1968

   Pub. L. 90–621 § 1(a) · 82 Stat. 1310

   Added · 26 U.S.C. § 368(a)(2)(D)

   Pub. L. 90–621, § 1(a), added subpar. (D)

   Source evidence

   Code amendment note
   Subsec. (a)(2)(D). Pub. L. 90–621, § 1(a), added subpar. (D).

5. 1968

   Pub. L. 90–621 § 1(b) · 82 Stat. 1310

   Inserted · 26 U.S.C. § 368(b)

   Pub. L. 90–621, § 1(b), inserted reference to the inclusion of the controlling corporation in term “a party to a reorganization” in reorganizations qualifying under paragraph (1)(A) of subsection (a) by reason of paragraph (2)(D) of subsection (a)

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 90–621, § 1(b), inserted reference to the inclusion of the controlling corporation in term “a party to a reorganization” in reorganizations qualifying under paragraph (1)(A) of subsection (a) by reason of paragraph (2)(D) of subsection (a).

6. 1971

   Pub. L. 91–693 § 1(a) · 84 Stat. 2077

   Added · 26 U.S.C. § 368(a)(2)(E)

   Pub. L. 91–693, § 1(a), added subpar. (E)

   Source evidence

   Code amendment note
   Subsec. (a)(2)(E). Pub. L. 91–693, § 1(a), added subpar. (E).

7. 1971

   Pub. L. 91–693 § 1(b) · 84 Stat. 2077

   Changed · 26 U.S.C. § 368(b)

   Pub. L. 91–693, § 1(b), defined “party to a reorganization” in the case of a reorganization qualifying under subsection (a)(1)(A) by reason of subsection (a)(2)(E)

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 91–693, § 1(b), defined “party to a reorganization” in the case of a reorganization qualifying under subsection (a)(1)(A) by reason of subsection (a)(2)(E).

8. 1976

   Pub. L. 94–455 § 2131(a) · 90 Stat. 1520

   Added · 26 U.S.C. § 368(a)(2)(F)

   Pub. L. 94–455, § 2131(a), added subpar. (F)

   Source evidence

   Code amendment note
   Subsec. (a)(2)(F). Pub. L. 94–455, § 2131(a), added subpar. (F).

   Enacted provision · exact public law section
   (a) Corporate Reorganizations.— Paragraph (2) of section 368(a)(special rules relating to definition of reorganization) is amended by adding at the end thereof the following new subparagraph: “(F) Certain trans actions involving 2 or more investment companies.— “(i) If immediately before a transaction described in paragraph (1)(other than subparagraph (E) thereof), 2 or more parties to the transaction were investment companies, then the transaction shall not be considered to be a reorganization with respect to any such investment company (and its shareholders and security holders) unless it was a regulated investment company, a real estate investment trust, or a corporation which meets the requirements of clause (ii). “(ii) A corporation meets the requirements of this clause if not more than 25 percent of the value of its total assets is invested in the stock and securities of any one issuer, and not more than 50 percent of the value of its total assets is invested in the stock and securities of 5 or fewer issuers. For purposes of this clause, all members of a controlled group of corporations (within the meaning of section 1563(a)) shall be treated as one issuer. 26 USC 1563. “Investment company.” “(iii) For purposes of this subparagraph the term ‘investment company’ means a regulated investment company, a real estate investment trust, or a corporation more than 50 percent of the value of whose total assets are stock and securities and more than 80 percent of the value of whose total assets are assets held for investment. in making the 50-percent and 80-percent determinations under the preceding sentence, stock and securities in any subsidiary corporation shall be disregarded and the parent corporation shall be deemed to own its ratable share of the subsidiary’s assets, and a corporation shall be considered a subsidiary if the parent owns 50 percent or more of the combined voting power of all classes of stock entitled to vote, or 50 percent or more of the total value of shares of all classes of stock outstanding. “(iv) For purposes of this subparagraph, in determining Total assets. total assets there shall be excluded cash and cash items (including receivables). Government securities, and, under regulations prescribed by the Secretary, assets acquired (through incurring indebtedness or otherwise for purposes of meeting the requirements of clause (ii) or ceasing to be an investment company. “(v) This subparagraph shall not apply if the stock of each investment company is owned substantially by the same persons in the same proportions. “(vi) If an investment company which is not diversified within the meaning of clause (ii) acquires assets of another corporation, clause (i) shall be applied to such investment company and its shareholders and security holders as though its assets had been acquired by such other corporation. If such investment company acquires stock of another corporation in a reorganization described in section 368(a)(1)(B)(hereafter referred to as the ‘actual acquisition’), clause (i) shall be applied to the shareholders and security holders of such investment company as though they had exchanged with such other corporation all of their stock in such investment company for a percentage of the value of the total outstanding stock of the other corporation equal to the percentage of the value of the total outstanding stock of such investment company which such shareholders own immediately after the actual acquisition. For purposes of section 1001, the deemed acquisition or exchange referred to in the two preceding sentences shall be treated as a sale or exchange of property by the corporation and by the shareholders and security holders to which clause (i) is applied.”.

9. 1976

   Pub. L. 94–455 § 806(f)(1) · 90 Stat. 1520

   Repealed · 26 U.S.C. § 368(c)

   Pub. L. 94–455, § 806(f)(1), which substituted “this part, and Part V,” for “and this part,” was repealed by Pub. L. 99–514, § 621(e)(1). See Effective Date of 1986 and 1976 Amendment notes below

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 94–455, § 806(f)(1), which substituted “this part, and Part V,” for “and this part,” was repealed by Pub. L. 99–514, § 621(e)(1). See Effective Date of 1986 and 1976 Amendment notes below.

   Enacted provision · exact public law section
   (1) Amendment of section 368.— Section 368(c) (relating to 26 USC 368. the definition of control) is amended by striking out “and this part,” and inserting in lieu thereof “this part, and part V,”.

10. 1978

    Pub. L. 95–600 title VII § 701(j)(1) · 92 Stat. 2763

    1. Substituted · 26 U.S.C. § 368(a)(2)(F)

       Pub. L. 95–600 substituted in cl. (iii), first sentence, “50 percent or more” and “80 percent or more” for “more than 50 percent” ; struck from cl. (vi), second sentence, “(hereafter referred to as the (‘actual acquisition’)” after “section 368(a)(1)(B)” and “and security holders” after “the shareholders”

    2. Substituted · 26 U.S.C. § 368(a)(2)(F)

       Pub. L. 95–600 substituted in cl. (iii), first sentence, “50 percent or more” and “does not meet the requirements” for “is not diversified within the meaning” ; struck from cl. (vi), second sentence, “(hereafter referred to as the (‘actual acquisition’)” after “section 368(a)(1)(B)” and “and security holders” after “the shareholders”

    3. Substituted · 26 U.S.C. § 368(a)(2)(F)

       Pub. L. 95–600 substituted “stock in such company for stock having a fair market value equal to the fair market value of their stock of such investment company immediately after the exchange” for “stock in such investment company for a percentage of the value of the total outstanding stock of the other corporation equal to the percentage of the value of the total outstanding stock of such investment company which such shareholders own immediately after the actual acquisition”;

    4. Added · 26 U.S.C. § 368(a)(2)(F)

       Pub. L. 95–600 added cls. (vii) and (viii)

    Source evidence

    Code amendment note
    Subsec. (a)(2)(F). Pub. L. 95–600 substituted in cl. (iii), first sentence, “50 percent or more” and “80 percent or more” for “more than 50 percent” and “more than 80 percent”; substituted in cl. (vi), first sentence, “does not meet the requirements” for “is not diversified within the meaning”; struck from cl. (vi), second sentence, “(hereafter referred to as the (‘actual acquisition’)” after “section 368(a)(1)(B)” and “and security holders” after “the shareholders” and substituted “stock in such company for stock having a fair market value equal to the fair market value of their stock of such investment company immediately after the exchange” for “stock in such investment company for a percentage of the value of the total outstanding stock of the other corporation equal to the percentage of the value of the total outstanding stock of such investment company which such shareholders own immediately after the actual acquisition”; and added cls. (vii) and (viii).

    Enacted provision · exact public law section
    (1) Amendments of section 368(a)(2)(f).— (A) The first sentence of clause (iii) of section 368(a)(2)(F) is amended— (i) by striking out “more than 50 percent” and inserting in lieu thereof “50 percent or more”; and (ii) by striking out “more than 80 percent” and inserting in lieu thereof “80 percent or more.” (B) The first sentence of clause (vi) of section 368(a)(2)(F) is amended by striking out “is not diversified within the meaning” and inserting in lieu thereof “does not meet the requirements”. (C) The second sentence of such clause (vi) is amended to read as follows: “If such investment company acquires stock of another corporation in a reorganization described in section 368(a)(1)(B), clause (i) shall be applied to the shareholders of such investment company as though they had exchanged with such other corporation all of their stock in such company for stock having a fair market value equal to the fair market value of their stock of such investment company immediately after the exchange.” (D) Subparagraph (F) of section 368(a)(2) is amended by adding at the end thereof the following new clauses: “(vii) For purposes of clauses (ii) and (iii), the term ‘securities’ includes obligations of State and local governments, commodity futures contracts, shares of regulated investment companies and real estate investment trusts, and other investments constituting a security within the meaning of the Investment Company Act of 1940(15 U.S.C. 80a–2(36)). “(viii) In applying paragraph (3) of section 267(b) in 26 USC 267. respect of any transaction to which this subparagraph applies, the reference to a personal holding company in such paragraph (3) shall be treated as including a reference to an investment company and the determination of whether a corporation is an investment company shall be made as of the time immediately before the transaction instead of with respect to the taxable year referred to in such paragraph (3).”

11. 1980

    Pub. L. 96–589 § 4(a) · 94 Stat. 3389

    Added · 26 U.S.C. § 368(a)(1)(G)

    Pub. L. 96–589, § 4(a), (h)(3), added subpar. (G)

    Source evidence

    Code amendment note
    Subsec. (a)(1)(G). Pub. L. 96–589, § 4(a), (h)(3), added subpar. (G).

    Enacted provision · exact public law section
    (a) Certain Transfers in Title 11 or Similar Cases To Be Included in Definition of Reorganization.— Paragraph (1) of section 368(a) (defining reorganization) is amended by adding at the end thereof the following new subparagraph: “(G) a transfer by a corporation of all or part of its assets to another corporation in a title 11 or similar case; but only if, in pursuance of the plan, stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualities under section 354, 355, or 356.”

12. 1980

    Pub. L. 96–589 § 4(c) · 94 Stat. 3389

    Inserted · 26 U.S.C. § 368(a)(2)(C)

    Pub. L. 96–589, § 4(c), inserted provision that a similar rule would apply to a transaction otherwise qualifying under par. (1)(G), where the requirements of subpars. (A) and (B) of section 354(b)(1) are met with respect to the acquisition of the assets or stock

    Source evidence

    Code amendment note
    Subsec. (a)(2)(C). Pub. L. 96–589, § 4(c), inserted provision that a similar rule would apply to a transaction otherwise qualifying under par. (1)(G), where the requirements of subpars. (A) and (B) of section 354(b)(1) are met with respect to the acquisition of the assets or stock.

    Enacted provision · exact public law section
    (c) Transfers of Assets to Subsidiaries.— Subparagraph (C) of section 368(a)(2) (relating to transfers of assets or stock to subsidiaries in certain paragraph (1)(A), (1)(B), and (1)(C) cases) is amended to read as follows: “(C) Transfers of assets or stock to subsidiaries in certain paragraph (1)(a), (1)(b), (1)(c), and (1)(g) cases.— A transaction otherwise qualifying under paragraph (1)(A), (1)(B), or (1)(C) shall not be disqualified by reason of the fact that part or all of the assets or stock which were acquired in the transaction are transferred to a corporation controlled by the corporation acquiring such assets or stock. A similar rule shall apply to a transaction otherwise qualifying under paragraph (1)(G) where the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met with respect to the acquisition of the assets or stock.”

13. 1980

    Pub. L. 96–589 § 4(d) · 94 Stat. 3389

    Inserted · 26 U.S.C. § 368(a)(2)(D)

    Pub. L. 96–589, § 4(d), among other changes, inserted reference to par. (1)(G)

    Source evidence

    Code amendment note
    Subsec. (a)(2)(D). Pub. L. 96–589, § 4(d), among other changes, inserted reference to par. (1)(G).

    Enacted provision · exact public law section
    (d) Use of Stock of Controlling Corporation.— Subparagraph (D) of section 368(a)(2) (relating to use of stock of controlling corporation 26 USC 368. in paragraph (1)(A) cases) is amended to read as follows: “(D) Use of stock of controlling corporation in paragraph (1)(a) and (1)(g) cases.— The acquisition by one corporation, in exchange for stock of a corporation (referred to in this subparagraph as ‘controlling corporation’) which is in control of the acquiring corporation, of substantially all of the properties of another corporation shall not disqualify a transaction under paragraph (1)(A) or (1)(G) if— “(i) no stock of the acquiring corporation is used in the transaction, and “(ii) in the case of a transaction under paragraph (1)(A), such transaction would have qualified under paragraph (1)(A) had the merger been into the controlling corporation.”

14. 1980

    Pub. L. 96–589 § 4(b) · 94 Stat. 3389

    Added · 26 U.S.C. § 368(a)(3)

    Pub. L. 96–589, § 4(b), added par. (3)

    Source evidence

    Code amendment note
    Subsec. (a)(3). Pub. L. 96–589, § 4(b), added par. (3).

    Enacted provision · exact public law section
    (b) Additional Rules for Coordinating Title 11 and Similar Cases With the General Reorganization Rules.— Section 368(a) is amended by adding at the end thereof the following new paragraph: “(3) Additional rules relating to title 11 and similar cases.— “(A) Title 11 or similar case defined.— For purposes of this part, the term ‘title 11 or similar case’ means— “(i) a case under title 11 of the United States Code, or “(ii) a receivership, foreclosure, or similar proceeding in a Federal or State court. “(B) Transfer of assets in a title 11 or similar case.— In applying paragraph (1)(G), a transfer of the assets of a corporation shall be treated as made in a title 11 or similar case if and only if— “(i) such corporation is under the jurisdiction of the court in such case, and “(ii) the transfer is pursuant to a plan of reorganization approved by the court. “(C) Reorganizations qualifying under paragraph (1)(g) and another provision.— If a transaction would (but for this subparagraph) qualify both— “(i) under subparagraph (G) of paragraph (1), and “(ii) under any other subparagraph of paragraph (1) or under section 332 or 351, then, for purposes of this subchapter (other than section 357(c)(1)), such transaction shall be treated as qualifying only under subparagraph (G) of paragraph (1). “(D) Agency receivership proceedings which involve financial institutions.— For purposes of subparagraphs (A) and (B), in the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution to which section 585 or 593 applies, the agency shall be treated as a court. “(E) Application of paragraph (2)(e)(ii).— In the case of a title 11 or similar case, the requirement of clause (ii) of paragraph (2)(E) shall be treated as met if— “(i) no former shareholder of the surviving corporation received any consideration for his stock, and “(ii) the former creditors of the surviving corporation exchanged, for an amount of voting stock of the controlling corporation, debt of the surviving corporation which had a fair market value equal to 80 percent or more of the total fair market value of the debt of the surviving corporation.”

15. 1980

    Pub. L. 96–589 § 4(h)(4) · 94 Stat. 3389

    Substituted · 26 U.S.C. § 368(b)

    Pub. L. 96–589, § 4(h)(4), substituted “paragraph (1)(A), (1)(B), (1)(C), or (1)(G) of subsection (a) by reason of paragraph (2)(C)” and “paragraph (1)(A) or (1)(G) of subsection (a) by reason of paragraph (2)(D)” for “paragraph (1)(A), (1)(B), or (1)(C) of subsection (a) by reason of paragraph (2)(C)” and “paragraph (1)(A) of subsection (a) by reason of paragraph (2)(D)”, respectively

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 96–589, § 4(h)(4), substituted “paragraph (1)(A), (1)(B), (1)(C), or (1)(G) of subsection (a) by reason of paragraph (2)(C)” and “paragraph (1)(A) or (1)(G) of subsection (a) by reason of paragraph (2)(D)” for “paragraph (1)(A), (1)(B), or (1)(C) of subsection (a) by reason of paragraph (2)(C)” and “paragraph (1)(A) of subsection (a) by reason of paragraph (2)(D)”, respectively.

    Enacted provision · exact public law section
    (4) Subsection (b) of section 368 (defining party to reorganization) is amended— (A) by striking out “or (1)(C)” in the third sentence and inserting in lieu thereof “(1)(C), or (1)(G)”, and (B) by striking out “paragraph (1)(A)” in the fourth sentence and inserting in lieu thereof “paragraph (1)(A) or (1)(G)”.

16. 1981

    Economic Recovery Tax Act of 1981

    Pub. L. 97–34 title II § 241 · 95 Stat. 175

    1. Substituted · 26 U.S.C. § 368(a)(3)(D)

       Pub. L. 97–34 substituted “Agency proceedings” for “Agency receivership proceedings” in heading, incorporated existing provisions in text designated cl. (i)

    2. Inserted · 26 U.S.C. § 368(a)(3)(D)

       Pub. L. 97–34 inserted in cl. (i)(II) definition for term “title 11 or similar case”

    3. Added · 26 U.S.C. § 368(a)(3)(D)

       Pub. L. 97–34 added cls. (ii) and (iii)

    Source evidence

    Code amendment note
    Subsec. (a)(3)(D). Pub. L. 97–34 substituted “Agency proceedings” for “Agency receivership proceedings” in heading, incorporated existing provisions in text designated cl. (i), inserted in cl. (i)(II) definition for term “title 11 or similar case”, and added cls. (ii) and (iii).

    Enacted provision · exact public law section
    SEC. 241. REORGANIZATIONS INVOLVING FINANCIALLY TROUBLED THRIFT INSTITUTIONS. Amendment of Section 368(a)(3)(D).—Section 368(a)(3)(D) (relating to agency receivership proceedings which involve financial institutions) is amended to read as follows: “(D) Agency proceedings which involve financial institutions.— “(i) For purpose of subparagraphs (A) and (B)— “(I) In the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution to which section 585 applies, the agency shall be treated as a court, and “(II) In the case of a financial institution to which “Title 11 or similar case.” section 593 applies, the term ‘title 11 or similar case’ means only a case in which the Board (which will be treated as the court in such case) makes the certification described in clause (ii). “(ii) A transaction otherwise meeting the requirements of subparagraph (G) of paragraph (1), in which the transferor corporation is a financial institution to which section 593 applies, will not be disqualified as a reorganization if no stock or securities of the corporation to which the assets are transferred (transferee) are received or distributed, but only if all of the following conditions are met: “(I) the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met with respect to the acquisition of the assets, “(II) substantially all of the liabilities of the transferor immediately before the transfer become, as a result of the transfer, liabilities of the transferee, and “(III) the Board certifies that the grounds set forth in section 1464(d)(6)(A) (i), (ii), or (iii) of title 12, United States Code, exist with respect to the transferor or will exist in the near future in the absence of action by the Board. “(iii) For purposes of this subparagraph, the ‘Board’ means the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation or, if neither has supervisory authority with respect to the transferor, the equivalent State authority.”

17. 1982

    Pub. L. 97–248 title II § 225(a) · 96 Stat. 324

    Inserted · 26 U.S.C. § 368(a)(1)(F)

    Pub. L. 97–248 inserted “of one corporation” after “place of organization”

    Source evidence

    Code amendment note
    Subsec. (a)(1)(F). Pub. L. 97–248 inserted “of one corporation” after “place of organization”.

    Enacted provision · exact public law section
    (a) General Rule.— Subparagraph (F) of section 368(a)( 1) (defining 26 USC 368. reorganization) is amended by inserting “of one corporation” after “place of organization”.

18. 1983

    Pub. L. 97–448 § 304(b) · 96 Stat. 2365

    Struck · 26 U.S.C. § 368(a)(2)(C)

    Pub. L. 97–448, § 304(b), struck out “or stock” after “acquisition of the assets”

    Source evidence

    Code amendment note
    Subsec. (a)(2)(C). Pub. L. 97–448, § 304(b), struck out “or stock” after “acquisition of the assets”.

    Enacted provision · exact public law section
    (b) Clarification of Certain Transfers of Assets in Subparagraph (G) Reorganizations.— The last sentence of subparagraph 26 USC 368. (C) of section 368(a)(2) (relating to special rules relating to definition of reorganization) is amended by striking out “or stock”.

19. 1983

    Pub. L. 97–448 § 304(c) · 96 Stat. 2365

    Substituted · 26 U.S.C. § 368(a)(3)(B)(i)

    Pub. L. 97–448, § 304(c), substituted “any party to the reorganization” for “such corporation”

    Source evidence

    Code amendment note
    Subsec. (a)(3)(B)(i). Pub. L. 97–448, § 304(c), substituted “any party to the reorganization” for “such corporation”.

    Enacted provision · exact public law section
    (c) Transfer of Assets in a Title 11 or Similar Case.— Clause (i) of section 368(a)(3)(B) (relating to transfer of assets in a title 11 or similar case) is amended by striking out “such corporation” and inserting in lieu thereof “any party to the reorganization”.

20. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 174(b)(5)(D) · 98 Stat. 494

    Struck · 26 U.S.C. § 368(a)(2)(F)(viii)

    Pub. L. 98–369, § 174(b)(5)(D), struck out cl. (viii) which provided that in applying paragraph (3) of section 267(b) in respect of any transaction to which this subparagraph applies, the reference to a personal holding company in such paragraph (3) be treated as including a reference to an investment company and the determination of whether a corporation is an investment company be made as of the time immediately before the transaction instead of with respect to the taxable year referred to in such paragraph (3)

    Source evidence

    Code amendment note
    Subsec. (a)(2)(F)(viii). Pub. L. 98–369, § 174(b)(5)(D), struck out cl. (viii) which provided that in applying paragraph (3) of section 267(b) in respect of any transaction to which this subparagraph applies, the reference to a personal holding company in such paragraph (3) be treated as including a reference to an investment company and the determination of whether a corporation is an investment company be made as of the time immediately before the transaction instead of with respect to the taxable year referred to in such paragraph (3).

    Enacted provision · exact public law section
    (D) Subparagraph (F) of section 368(a)(2) is amended by 26 USC 368. striking out clause (viii).

21. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 63(a) · 98 Stat. 494

    Added · 26 U.S.C. § 368(a)(2)(G)

    Pub. L. 98–369, § 63(a), added subpar. (G)

    Source evidence

    Code amendment note
    Subsec. (a)(2)(G). Pub. L. 98–369, § 63(a), added subpar. (G).

    Enacted provision · exact public law section
    (a) In General.— Paragraph (2) of section 368(a) (relating to special 26 USC 368. rules for paragraph (1)) is amended by adding at the end thereof the following new subparagraph: “(G) Distribution requirement for paragraph (1)(c).— “(i) In general.— A transaction shall fail to meet the requirements of paragraph (1)(C) unless the acquired corporation distributes the stock, securities, and other properties it receives, as well as its other properties, in pursuance of the plan of reorganization. “(ii) Exception.— The Secretary may waive the application of clause (i) to any transaction subject to any conditions the Secretary may prescribe.”

22. 1984

    Tax Reform Act of 1984

    Pub. L. 98–369 § 64(a) · 98 Stat. 494

    1. Amended · 26 U.S.C. § 368(c)

       Pub. L. 98–369, § 64(a), designated existing provisions as par. (1)

    2. Added · 26 U.S.C. § 368(c)

       Pub. L. 98–369, § 64(a), added par. (2)

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 98–369, § 64(a), designated existing provisions as par. (1) and added par. (2).

    Enacted provision · exact public law section
    (a) In general.— Subsection (c) of section 368 (defining control) is amended to read as follows: “(c) Control Defined.— “(1) In general.— For purposes of part I (other than section 304), part II, this part, and part V, the term ‘control’ means the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation. “(2) Special rule for determining whether certain transactions are described in subsection (a) (1) (d).— In the case of any transaction with respect to which the requirements of subparagraphs (A) and (B) of section ‘354(b)(1) are met, for purposes of determining whether such transaction is described in subparagraph (D) of subsection (a)(1), the term ‘control’ has the meaning given to such term by section 304(c).”

23. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1804(h)(3) · 100 Stat. 2085

    Inserted · 26 U.S.C. § 368(a)(2)(A)

    Pub. L. 99–514, § 1804(h)(3), inserted “(other than for purposes of subparagraph (C))” after “subchapter”

    Source evidence

    Code amendment note
    Subsec. (a)(2)(A). Pub. L. 99–514, § 1804(h)(3), inserted “(other than for purposes of subparagraph (C))” after “subchapter”.

    Enacted provision · exact public law section
    (3) Section 368(a)(2) is amended by inserting “(other than for purposes of subparagraph (C))” in subparagraph (A) after “subchapter”.

24. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1879 · 100 Stat. 2085

    Amended · 26 U.S.C. § 368(a)(2)(F)(ii)

    Pub. L. 99–514, § 1879(l)(1), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “A corporation meets the requirements of this clause if not more than 25 percent of the value of its total assets is invested in the stock and securities of any one issuer, and not more than 50 percent of the value of its total assets is invested in the stock and securities of 5 or fewer issuers. For purposes of this clause, all members of a controlled group of corporations (within the meaning of section 1563(a)) shall be treated as one issuer.”

    Source evidence

    Code amendment note
    Subsec. (a)(2)(F)(ii). Pub. L. 99–514, § 1879(l)(1), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “A corporation meets the requirements of this clause if not more than 25 percent of the value of its total assets is invested in the stock and securities of any one issuer, and not more than 50 percent of the value of its total assets is invested in the stock and securities of 5 or fewer issuers. For purposes of this clause, all members of a controlled group of corporations (within the meaning of section 1563(a)) shall be treated as one issuer.”

    Enacted provision · exact public law section
    SEC. 1879. MISCELLANEOUS PROVISIONS. (a) Waiver of Estimated Tax Penalties.— No addition to tax shall be made under section 6654 or 6655 of the Internal Revenue Code of 1954 (relating to failure to pay estimated income tax) for any period before April 16, 1985 (March 16, 1985 in the case of a taxpayer subject to section 6655 of such Code), with respect to any underpayment, to the extent that such underpayment was created or increased by any provision of the Tax Reform Act of 1984. (b) Amendments Related to Orphan Drug Credit.— (1) Clause (ii) of section 28(b)(2)(A) (defining clinical testing) is amended— (A) by striking out “the date of such drug” in subclause (I) and inserting in lieu thereof “the date such drug”, and (B) by striking out “of such Act” in subclause (II) and inserting in lieu thereof “of such Act or, if the drug is a biological product, before the date on which a license for such drug is issued under section 351 of the Public Health Services Act”. (2) Paragraph (1) of section 28(d) (defining rare disease or condition) is amended to read as follows: “(1) Rare disease or condition.— For purposes of this section, the term ‘rare disease or condition’ means any disease or condition which— “(A) affects less than 200,000 persons in the United States, or “(B) affects more than 200,000 persons in the United States but for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug. Determinations under the preceding sentence with respect to any drug shall be made on the basis of the facts and circumstances as of the date such drug is designated under section 526 of the Federal Food, Drug, and Cosmetic Act.” (3) The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 1982, in taxable years ending after such date. (c) Treatment of Sales Within Affiliated Group for Purposes of Section 29.— (1) Paragraph (8) of section 29(d) (relating to related persons) is amended by adding at the end thereof the following new sentence: “In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling qualified fuels to an unrelated person if such fuels are sold to such a person by another member of such group.” (2) The amendment made by paragraph (1) shall take effect as if included in the amendments made by section 231 of Public Law 96–223. (d) Returns and Records With Respect to Certain Fringe Benefits.— (1) Subsection (d) of section 6039D (added by section 1 of Public Law 98–611) is amended to read as follows: “(d) Definitions.— For purposes of this section— “(1) Specified fringe benefit plan.— The term ‘specified fringe benefit plan’ means— “(A) any qualified group legal services plan (as defined in section 120), “(B) any cafeteria plan (as defined in section 125), and “(C) any educational assistance plan (as defined in section 127). “(2) Applicable exclusion.— The term ‘applicable exclusion’ means— “(A) section 120 in the case of a qualified group legal services plan, “(B) section 125 in the case of a cafeteria plan, and “(C) section 127 in the case of an educational assistance plan.” (2) The section 6039D added by section 1 of Public Law 98–612 is hereby repealed. (e) Repeal of Joint Committee Report Requirement.— Section 6405 (relating to reports of refunds and credits) is amended by striking out subsection (b) and redesignating subsections (c), (d), and (e) as subsections (b), (c), and (d), respectively. (f) Amendments Related to Public Law 99–121.— (1) The table contained in section 467(e)(3)(A) is amended— (A) by striking out “18-year real property” and inserting in lieu thereof “19-year real property”, and (B) by striking out “18 years” and inserting in lieu thereof “ 19 years”. (2) The amendments made by paragraph (1) shall take effect as if included in the amendments made by section 103 of Public Law 99–121. (g) Defined Contribution Plan of Rural Electric Cooperative May Include Qualified Cash or Deferred Arrangement.— (1) In general.— Paragraphs (1) and (2) of section 401(k) (relating to cash or deferred arrangements) are each amended by striking out “(or a pre-ERISA money purchase plan)” and inserting in lieu thereof “, a pre-ERISA money purchase plan, or a rural electric cooperative plan”. (2) Rural electric cooperative plan defined.— Subsection (k) of section 401 is amended by adding at the end thereof the following new paragraph: “(6) Rural electric cooperative plan.— For purposes of this subsection, the term ‘rural electric cooperative plan* means any pension plan— “(A) which is a defined contribution plan (as defined in section 414(i)), and “(B) which is established and maintained by a rural electric cooperative (as defined in section 457(d)(9)(B)) or a national association of such rural electric cooperatives.” (3) Effective date.— The amendments made by this subsection shall apply to plan years beginning after December 31, 1984. (h) Clarification of Definition of Newly Discovered Oil.— (1) In general.— Paragraph (2) of section 4991(e) (defining newly discovered oil) is amended by adding at the end thereof the following new sentences: “Such term includes any production from a property which did not produce oil in commercial quantities during calendar year 1978. For purposes of the preceding sentence, a property shall not be treated as producing oil in commercial quantities during calendar year 1978 if, during calendar year 1978 (A) the aggregate amount of oil produced from such property did not exceed 2,200 barrels (whether or not such oil was sold), and (B) no well on such property was in production for a total of more than 72 hours.” (2) Effective date.— The amendments made by paragraph (1) shall apply to oil removed after February 29, 1980. (i) Medicinal Alcohol, Etc. Brought Into the United States From Puerto Rico or the Virgin Islands Eligible for Draw-back.— (1) Section 7652 (relating to shipments to the United States) is amended by adding at the end thereof the following new subsection: “(g) Drawback for Medicinal Alcohol, Etc.— In the case of medicines, medicinal preparations, food products, flavors, or flavoring extracts containing distilled spirits, which are unfit for beverage purposes and which are brought into the United States from Puerto Rico or the Virgin Islands— “(1) subpart F of part II of subchapter A of chapter 51 shall be applied as if— “(A) the use and tax determination described in section 5131(a) had occurred in the United States by a United States person at the time the article is brought into the United States, and “(B) the rate of tax were the rate applicable under subsection (f) of this section, and “(2) no amount shall be covered into the treasuries of Puerto Rico or the Virgin Islands.” (2) The amendment made by paragraph (1) shall apply to articles brought into the United States after the date of the enactment of this Act. (3) (A) Section 7652 of the Internal Revenue Code of 1954 (other than subsection (f) thereof) shall not prevent the payment to Puerto Rico or the Virgin Islands of amounts with respect to medicines, medicinal preparations, food products, flavors, or flavoring extracts containing distilled spirits, which are unfit for beverage purposes and which are brought into the United States from Puerto Rico or the Virgin Islands on or before the date of the enactment of this Act. (B) With respect to articles brought into the United States after September 27, 1985, subparagraph (A) shall apply only if the Secretary of the Treasury or his delegate is satisfied that the amounts paid to Puerto Rico or the Virgin Islands under subparagraph (A) are being repaid to the proper persons who used the distilled spirits in such articles. (j) Allowance of Investment Credit to Eligible Section 501(d i Organizations.— (1) In general.— Section 48 (relating to definitions and special rules) is amended by redesignating subsection (r) as subsection (s) and by inserting after subsection (q) the following new subsection: “(r) Certain Section 501(d) Organizations.— “(1) In general.— In the case of eligible section 501(d) organizations— “(A) any business engaged in by such organization for the common benefit of its members and the taxable income from which is included in the gross income of its members shall be treated as an unrelated business for purposes of paragraph (4) of subsection (a), “(B) the qualified investment for each taxable year with respect to such business shall be apportioned pro rata among such members in the same manner as the taxable income of such organization, and “(C) any individual to whom any investment has been apportioned under subparagraph (B) shall be treated for purposes of this subpart (other than section 47) as the taxpayer with respect to such investment, and such investment shall not (by reason of such apportionment) lose its character as an investment in new section 38 property or used section 38 property, as the case may be. “(2) Limitation on used section 38 property applied at organization level.— The limitation under subparagraph (A) of subsection (c)(2) shall apply with respect to the section 501(d) organization. “(3) Recapture.— For purposes of applying section 47 to any property for which credit was allowed under section 38 by reason of this subsection— “(A) the section 501(d) organization shall be treated as the taxpayer to which the credit under section 38 was allowed, “(B) the amount of such credit allowed with respect to the property shall be treated as the amount which would have been allowed to the section 501(d) organization were such credit allowable to such organization, “(C) subparagraph (D) of section 47(a)(5) shall not apply, and “(D) the amount of the increase in tax under section 47 for any taxable year with respect to property to which this subsection applies shall be allocated pro rata among the members of such organization in the same manner as such organization’s taxable income for such year is allocated among such members. “(4) No investment credit allowed to member if member claims other investment credit.— No credit shall be allowed to an individual by reason of this subsection if such individual claims a credit under section 38 without regard to this subsection. The amount of the credit not allowed by reason of the preceding sentence shall not be allowed to any other person. “(5) Eligible section 501 (d) organization.— For purposes of this subsection, the term ‘eligible section 501(d) organization’ means any organization— “(A) which elects to be treated as an organization described in section 501(d) and which is exempt from tax under section 501(a), and “(B) which does not provide a substantially higher standard of living for any person or persons than it does for the majority of the members of the community.” (2) Effective date— The amendments made by this subsection shall apply to periods after December 31, 1978 (under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1954), in taxable years ending after such date. (3) Special rule.— If refund or credit of any overpayment of tax resulting from the application of this subsection is prevented at any time before the close of the date which is 1 year after the date of the enactment of this Act by operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the application of the amendments made by this subsection) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period. (k) Amendment Related to Mutual Savings Banks Described in Section 591(b)— (1) In general.— Subparagraph (B) of section 501(c)(14) (relating to list of tax-exempt organizations) is amended— (A) by striking out “or” at the end of clause (ii), (B) by striking out the period at the end of clause (iii) and inserting in lieu thereof a comma and “or”, and (C) by inserting at the end thereof the following new clause: “(iv) mutual savings banks described in section 591(b)”. (2) Effective date.— The amendments made by this subsection shall apply to taxable years ending after August 13, 1981. (l) Amendment to Section 368(a)(2)(F).— (1) In general.— Clause (ii) of section 368(a)(2)(F) (relating to certain transactions involving 2 or more investment companies) is amended to read as follows: “(ii) A corporation meets the requirements of this clause if not more than 25 percent of the value of its total assets is invested in the stock and securities of any one issuer (other than stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause (ii)), and not more than 50 percent of the value of its total assets is invested in the stock and securities of 5 or fewer issuers (other than stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause (ii)). For purposes of this clause, all members of a controlled group of corpora-tions (within the meaning of section 1563(a)) shall be treated as one issuer.” (2) Effective date.— The amendment made by this subsection shall apply as if included in section 2131 of the Tax Reform Act of 1976. (m) Amendments Relating to Subchapter S Corporations.— (1) In general.— (A) Section 1361(d)(3) (relating to qualified subchapter S trusts) is amended by adding at the end thereof the following new sentence: “A substantially separate and independent share of a trust treated as a separate trust under section 663(c) shall be treated as a separate trust for purposes of this subsection and subsection (c).” (B) Section 1368(e)(1) (relating to definitions and special rules) is amended by striking out the period at the end of subparagraph (A) and inserting in lieu thereof “and no adjustment shall be made for Federal taxes attributable to any taxable year in which the corporation was a C corporation.” (2) Effective date.— The amendments made by this subsection shall apply to taxable years beginning after December 31, 1982. (n) Amendment Relating to Section 2523.— (1) In general.— Subparagraph (A) of section 2523(f)(4) (relating to election with respect to life estate for donee spouse) is amended to read as follows: “(A) Time and manner.— An election under this subsection with respect to any property shall be made on or before the date prescribed by section 6075(b) for filing a gift tax return with respect to the transfer (determined without regard to section 6019(2)) and shall be made in such manner as the Secretary shall by regulations prescribe.” (2) Effective date.— The amendment made by paragraph (1) shall apply to transfers made after December 31, 1985. (3) Special rule for certain transfers in October 1984.— An election under section 2523(f) of the Internal Revenue Code of 1954 with respect to an interest in property which— (A) was transferred during October 1984, and (B) was transferred pursuant to a trust instrument stating that the grantor’s intention was that the property of the trust would constitute qualified terminable interest property as to which a Federal gift tax marital deduction would be allowed upon the grantor’s election, shall be made on the return of tax imposed by section 2501 of such Code for the calendar year 1984 which is filed on or before the due date of such return or, if a timely return is not filed, on the first such return filed after the due date of such return and before December 31, 1986. (o) Amendments Relating to Section 4994.— (1) For purposes of section 4991(b), a “qualified charitable interest” shall include an economic interest in crude oil held by the Episcopal Royalty Company, an entity created in 1961 as a subsidiary of the Protestant Episcopal Church Foundation of the Diocese of Oklahoma. (2) The amendment made by this subsection shall apply to oil removed after February 29, 1980. (p) Amendment Related to Section 252 of the Economic Recovery Tax Act of 1981.— (1) Notwithstanding subsection (c) of section 252 of the Economic Recovery Tax Act of 1981, the amendment made by subsection (a) of such section 252 (and the provisions of subsection (b) of such section 252) shall apply to any transfer of stock to any person if— (A) such transfer occurred in November or December of 1973 and was pursuant to the exercise of an option granted in November or December of 1971, (B) in December 1973 the corporation granting the option was acquired by another corporation in a transaction qualifying as a reorganization under section 368 of the Internal Revenue Code of 1954, (C) the fair market value (as of July 1, 1974) of the stock received by such person in the reorganization in exchange for the stock transferred to him pursuant to the exercise of such option was less than 50 percent of the fair market value of the stock so received (as of December 4, 1973), (D) in 1975 or 1976 such person sold substantially all of the stock received in such reorganization, and (E) such person makes an election under this section at such time and in such manner as the Secretary of the Treasury or his delegate shall prescribe. (2) Limitation on amount of benefit.— Subsection (a) shall not apply to transfers with respect to any employee to the extent that the application of subsection (a) with respect to such employee would (but for this paragraph) result in a reduction in liability for income tax with respect to such employee for all taxable years in excess of $100,000 (determined without regard to any interest). (3) Statute of limitations.— (A) Overpayments.— If refund or credit of any overpayment of tax resulting from the application of subsection (a) is prevented on the date of the enactment of this Act (or at any time within 6 months after such date of enactment) by the operation of any law or rule of law, refund or credit of such overpayment (to the extent attributable to the application of subsection (a)) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 6-month period. (B) Deficiencies.— If the assessment of any deficiency of tax resulting from the application of subsection (a) is prevented on the date of the enactment of this Act (or at any time within 6 months after such date of enactment) by the operation of any law or rule of law, assessment of such deficiency (to the extent attributable to the application of subsection (a)) may, nevertheless, be made within such 6-month period. (q) Treatment of Certain Self-Insured Workers’ Compensation Funds.— (1) Moratorium on collection activities.— During the period beginning on the date of the enactment of this Act and ending on August 16, 1987, the Secretary of the Treasury or his delegate— (A) shall suspend any pending audit of any self-insured workers’ compensation fund where the audit involves the issue of whether such fund is a mutual insurance company, (B) shall not initiate any audit of any such fund involving such issue, and (C) shall take no steps to collect from such fund any underpayment, interest, or penalty involving such issue. (2) Suspension of running of interest.— No interest shall be payable under chapter 67 of the Internal Revenue Code of 1986 on any underpayment by a self-insured workers’ compensation fund involving such issue for the period beginning on August 16, 1986, and ending on August 16, 1987. (3) Additional time to file tax court proceeding.— If the period during which a petition involving such issue could have been filed with the Tax Court by any self-insured workers’ compensation fund had not expired before August 16, 1986, such period shall not expire before August 16, 1987. (4) Self-insured workers’ compensation fund.— For purposes of this subsection, the term “self-insured workers’ compensation fund” means any self-insured workers’ compensation fund established pursuant to applicable State law regulating self-insured workers’ compensation funds. (r) Returns of Alcohol, Tobacco, and Firearms Taxes.— (1) In general.— Subsection (b) of section 6091 of such Code (relating to place for filing returns or other documents) is amended by adding at the end thereof the following new paragraph: “(6) Alcohol, tobacco, and firearms returns, etc — In the case of any return of tax imposed by subtitle E (relating to taxes on alcohol, tobacco, and firearms), subsection (a) shall apply (and this subsection shall not apply).” (2) Effective date.— The amendment made by paragraph (1) shall take effect on the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act. (s) Treatment of Stripping Tax-Exempt Bonds..— (1) In general.— Subsection (d) of section 1286 is amended to read as follows: “(d) Special Rules for Tax-Exempt Obligations.— In the case of any tax-exempt obligation (as defined in section 1275(a)(3)) from which 1 or more coupons have been stripped— “(1) the amount of original issue discount determined under subsection (a) with respect to any stripped bond or stripped coupon from such obligation shall be the amount which produces a yield to maturity (as of the purchase date) equal to the lower of— “(A) the coupon rate of interest on such obligation before the separation of coupons, or “(B) the yield to maturity (on the basis of purchase price) of the stripped obligation or coupon, “(2) the amount of original issue discount determined under paragraph (1) shall be taken into account in determining the adjusted basis of the holder under section 1288, “(3) subsection (b)(1) shall not apply, and “(4) subsection (b)(2) shall be applied by increasing the basis of the bond or coupon by the interest accrued but not paid before the time such bond or coupon was disposed of (and not previously reflected in basis).” (2) Effective date.— The amendment made by paragraph (1) shall apply to any purchase or sale of any stripped tax-exempt obligation or stripped coupon from such an obligation after the date of the enactment of this Act. (t) Disposition of Certain Subsidiary.— If for a taxable year of an affiliated group filing a consolidated return ending on or before December 31, 1987, there is 1 disposition of stock of a subsidiary incorporated in Delaware on December 24, 1969, and whose principal place of business is in New Orleans, Louisiana (within the meaning of Treasury Regulation section 1.1502–19), the amount required to be included in income with respect to such disposition under Treasury Regulation section 1.1502–19(a) shall, notwithstanding such section, be included in income ratably over the 15-year period beginning with the taxable year in which the disposition occurs and ending with the 14th succeeding taxable year. (u) Amendments Related to Single Employer Pension Plan Amendments Act of 1986.— (1) Clarification of applicability of notice requirement for significant reductions in benefit accruals.— Section 206(h) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1054(h); 100 Stat. 243) is amended— (A) by striking out “single-employer plan” and inserting in lieu thereof “plan described in paragraph (2)”; (B) by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), respectively; (C) by striking out “paragraph (1), (2), or (3)” and inserting in lieu thereof “subparagraph (A), (B), or (C)”; (D) by inserting “ (1)” after “(h)”; and (E) by adding at the end the following new paragraph: “(2) A plan is described in this paragraph if such plan is— “(A) a defined benefit plan, or “(B) an individual account plan which is subject to the funding standards of section 302.” (2) Treatment of section 4049 trusts established pursuant to section 4042(i).— Section 4049(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1349(a); 100 Stat. 258) is amended by inserting “or 4042(i)” after “section 4041(c)(3)(B) (ii) or (iii)”. (3) Correction of definition of multiemployer plan for purposes of title i.— Section 11016(c)(1) of the Single-Employer Pension Plan Amendments Act of 1986 (100 Stat. 273) and the amendment made thereby are repealed. (4) Effective date.— (A) General rule.— Except as provided in subparagraph (B), the preceding provisions of this subsection shall be effective as if such provisions were included in the enactment of the Single-Employer Pension Plan Amendments Act of 1986, (B) Special rule— Subparagraph (B) of section 206(h)(2) of the Employee Retirement Income Security Act of 1974 (as amended by paragraph (1)) shall apply only with respect to plan amendments adopted on or after the date of the enactment of this Act.

25. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1804(g)(2) · 100 Stat. 2085

    Inserted · 26 U.S.C. § 368(a)(2)(G)(i)

    Pub. L. 99–514, § 1804(g)(2), inserted “For purposes of the preceding sentence, if the acquired corporation is liquidated pursuant to the plan of reorganization, any distribution to its creditors in connection with such liquidation shall be treated as pursuant to the plan of reorganization.”

    Source evidence

    Code amendment note
    Subsec. (a)(2)(G)(i). Pub. L. 99–514, § 1804(g)(2), inserted “For purposes of the preceding sentence, if the acquired corporation is liquidated pursuant to the plan of reorganization, any distribution to its creditors in connection with such liquidation shall be treated as pursuant to the plan of reorganization.”

    Enacted provision · exact public law section
    (2) Clarification of transfers to creditors.— Section 368(a)(2)(G)(i) (relating to distribution requirement) is amended by adding at the end thereof the following new sentence: “For purposes of the preceding sentence, if the acquired corporation is liquidated pursuant to the plan of reorganization, any distribution to its creditors in connection with such liquidation shall be treated as pursuant to the plan of reorganization.”

26. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1804(h)(2) · 100 Stat. 2085

    Added · 26 U.S.C. § 368(a)(2)(H)

    Pub. L. 99–514, § 1804(h)(2), added subpar. (H)

    Source evidence

    Code amendment note
    Subsec. (a)(2)(H). Pub. L. 99–514, § 1804(h)(2), added subpar. (H).

    Enacted provision · exact public law section
    (2) Paragraph (2) of section 368(a) is amended by adding at the end thereof the following new subparagraph: “(H) Special rule for determining whether certain transactions are qualified under paragraph (1)(D).— In the case of any transaction with respect to which the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met, for purposes of determining whether such transaction qualifies under subparagraph (D) of paragraph (1), the term ‘control’ has the meaning given to such term by section 304(c).”

27. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 904(a) · 100 Stat. 2085

    Repealed · 26 U.S.C. § 368(a)(3)(D)

    Pub. L. 99–514, § 904(a), (c)(1), as amended by Pub. L. 100–647, § 4012(a)(1), which (applicable to acquisitions after Dec. 31, 1989, in taxable years ending after such date) directed amendment of subpar. (D) to read “(D) Agency receivership proceedings which involve financial institutions.—For purposes of subparagraphs (A) and (B), in the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution referred to in section 581 or 591, the agency shall be treated as a court.”, was repealed by Pub. L. 101–73, § 1401(b)(1), (c)(4), eff. Oct. 22, 1986, and I.R.C. of 1986 applicable as if the amendments made by such section had not been enacted

    Source evidence

    Code amendment note
    Subsec. (a)(3)(D). Pub. L. 99–514, § 904(a), (c)(1), as amended by Pub. L. 100–647, § 4012(a)(1), which (applicable to acquisitions after Dec. 31, 1989, in taxable years ending after such date) directed amendment of subpar. (D) to read “(D) Agency receivership proceedings which involve financial institutions.—For purposes of subparagraphs (A) and (B), in the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution referred to in section 581 or 591, the agency shall be treated as a court.”, was repealed by Pub. L. 101–73, § 1401(b)(1), (c)(4), eff. Oct. 22, 1986, and I.R.C. of 1986 applicable as if the amendments made by such section had not been enacted.

    Enacted provision · exact public law section
    (a) General Rule.— Subparagraph (D) of section 368(a)(3) (relating to agency receivership proceedings which involve financial institutions) is amended to read as follows: “(D) Agency receivership proceedings which involve financial institutions.— For purposes of subparagraphs (A) and (B), in the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution referred to in section 581 or 591, the agency shall be treated as a court.”

28. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1804(h)(1) · 100 Stat. 2085

    1. Changed · 26 U.S.C. § 368(c)

       Pub. L. 99–514, § 1804(h)(1), in amending subsec. (c) generally

    2. Struck · 26 U.S.C. § 368(c)

       Pub. L. 99–514, § 1804(h)(1), in struck out par. (1) designation

    3. Struck · 26 U.S.C. § 368(c)

       Pub. L. 99–514, § 1804(h)(1), in struck out par. (2) defining term “control” as having meaning given to such term by section 304(c) in case of any transaction with respect to which requirements of subpars. (A) and (B) of section 354(b)(1) are met, for purposes of determining whether such transaction is described in subpar. (D) of subsec. (a)(1)

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 99–514, § 1804(h)(1), in amending subsec. (c) generally, struck out par. (1) designation and struck out par. (2) defining term “control” as having meaning given to such term by section 304(c) in case of any transaction with respect to which requirements of subpars. (A) and (B) of section 354(b)(1) are met, for purposes of determining whether such transaction is described in subpar. (D) of subsec. (a)(1).

    Enacted provision · exact public law section
    (1) Subsection (c) of section 368 (defining control) is amended to read as follows: “(c) Control Defined.— For purposes of part I (other than section 304), part II, this part, and part V, the term ‘control’ means the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation.”

29. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 621(e)(1) · 100 Stat. 2085

    Repealed · 26 U.S.C. § 368(c)

    Pub. L. 99–514, § 621(e)(1), repealed amendment by Pub. L. 94–455, § 806(f)(1). See 1976 Amendment note below

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 99–514, § 621(e)(1), repealed amendment by Pub. L. 94–455, § 806(f)(1). See 1976 Amendment note below.

    Enacted provision · exact public law section
    (1) Subsections (e) and (f) of section 806 of the Tax Reform Act of 1976 (including the amendment treated as part of such subsections under section 59(b) of the Tax Reform Act of 1984) are hereby repealed.

30. 1988

    Technical and Miscellaneous Revenue Act of 1988

    Pub. L. 100–647 § 1018(q)(5) · 102 Stat. 3342

    Struck and inserted · 26 U.S.C. § 368(a)(2)(F)(ii)

    Pub. L. 100–647, § 1018(q)(5), struck out “(other than stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause (ii))” after “any one issuer” and after “or fewer issuers” and inserted at end “For purposes of this clause, a person holding stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause shall, except as provided in regulations, be treated as holding its proportionate share of the assets held by such company or trust.”

    Source evidence

    Code amendment note
    Subsec. (a)(2)(F)(ii). Pub. L. 100–647, § 1018(q)(5), struck out “(other than stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause (ii))” after “any one issuer” and after “or fewer issuers” and inserted at end “For purposes of this clause, a person holding stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause shall, except as provided in regulations, be treated as holding its proportionate share of the assets held by such company or trust.”

    Enacted provision · exact public law section
    (5) Clause (ii) of section 368(a)(2)(F) of the 1986 Code is amended— (A) by striking out the two parenthetical phrases in the first sentence, and (B) by adding at the end thereof the following new sentence: “For purposes of this clause, a person holding stock in a regulated investment company, a real estate investment trust, or an investment company which meets the requirements of this clause shall, except as provided in regulations, be treated as holding its proportionate share of the assets held by such company or trust.’

31. 1988

    Technical and Miscellaneous Revenue Act of 1988

    Pub. L. 100–647 § 4012(b)(1)(A) · 102 Stat. 3342

    Added · 26 U.S.C. § 368(a)(3)(D)(iv); 26 U.S.C. § 368(a)(3)(D)(v)

    Pub. L. 100–647, § 4012(b)(1)(A), amended subpar. (D), as in effect before the amendment made by section 904(a) of Pub. L. 99–514, by adding cls. (iv) and (v)

    Source evidence

    Code amendment note
    Subsec. (a)(3)(D)(iv), (v). Pub. L. 100–647, § 4012(b)(1)(A), amended subpar. (D), as in effect before the amendment made by section 904(a) of Pub. L. 99–514, by adding cls. (iv) and (v).

    Enacted provision · exact public law section
    (A) Section 368(a)(3)(D) of the 1986 Code (as in effect before the amendment made by section 904(a) of the Reform Act) is amended by adding at the end thereof the following new clauses: “(iv) In the case of a financial institution to which section 585 applies— “(I) the term ‘title 11 or similar case’ means only a case in which the applicable authority (which shall be treated as the court in such case) makes the certification described in subclause (II), and “(II) clause (ii) shall apply to such institution, except that for purposes of clause (ii)(III), the applicable authority must certify that the grounds set forth in such clause (modified in such manner as the Secretary determines necessary because such institution is not an institution to which section 593 applies) exist with respect to such transferor or will exist in the near future in the absence of action by the applicable authority. For purposes of this clause, the term ‘applicable authority’ means the Comptroller of the Currency or the Federal Deposit Insurance Corporation, or if neither has the supervisory authority with respect to the transfer, the equivalent State authority. “(v) For purposes of this subparagraph, in applying section 593, the determination as to whether a corporation is a domestic building and loan association shall be made without regard to section 7701(a)(19)(C).”

32. 1989

    Financial Institutions Reform, Recovery, and Enforcement Act of 1989

    Pub. L. 101–73 § 1401(b)(1) · 103 Stat. 183

    Repealed · 26 U.S.C. § 368(a)(3)(D)

    Pub. L. 101–73, § 1401(b)(1), repealed amendment made by Pub. L. 99–514, § 904(a), see 1986 Amendment note below

    Source evidence

    Code amendment note
    Subsec. (a)(3)(D). Pub. L. 101–73, § 1401(b)(1), repealed amendment made by Pub. L. 99–514, § 904(a), see 1986 Amendment note below.

    Enacted provision · exact public law section
    (1) Section 904 of the Tax Reform Act of 1986 (other than subsection (c)(2)(B) thereof) is hereby repealed and the Internal 26 USC 597 note. Revenue Code of 1986 shall be applied as if the amendments made by such section had not been enacted.

33. 1989

    Financial Institutions Reform, Recovery, and Enforcement Act of 1989

    Pub. L. 101–73 § 1401(a)(1) · 103 Stat. 183

    1. Inserted · 26 U.S.C. § 368(a)(3)(D)

       Pub. L. 101–73, § 1401(a)(1), inserted “receivership” in heading

    2. Amended · 26 U.S.C. § 368(a)(3)(D)

       Pub. L. 101–73, § 1401(a)(1), amended text generally, changing the structure of the subparagraph from one consisting of five clauses designated (i) to (v) to one consisting of a single undesignated subparagraph

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 101–73, § 1401(a)(1), inserted “receivership” in heading and amended text generally, changing the structure of the subparagraph from one consisting of five clauses designated (i) to (v) to one consisting of a single undesignated subparagraph.

    Enacted provision · exact public law section
    (1) Reorganizations.— Subparagraph (D) of section 368(a)(3) of the Internal Revenue Code of 1986 (as amended by section 26 USC 368. 4012 of the Technical and Miscellaneous Revenue Act of 1988) is amended to read as follows: “(D) Agency receivership proceedings which involve financial institutions.— For purposes of subparagraphs (A) and (B), in the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution referred to in section 581 or 591, the agency shall be treated as a court.”

34. 1997

    Pub. L. 105–34 title X § 1012(c)(2) · 111 Stat. 788

    Amended · 26 U.S.C. § 368(a)(2)(H)

    Pub. L. 105–34 amended heading and text of subpar. (H) generally. Prior to amendment, text read as follows: “In the case of any transaction with respect to which the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met, for purposes of determining whether such transaction qualifies under subparagraph (D) of paragraph (1), the term ‘control’ has the meaning given to such term by section 304(c).”

    Source evidence

    Code amendment note
    Subsec. (a)(2)(H). Pub. L. 105–34 amended heading and text of subpar. (H) generally. Prior to amendment, text read as follows: “In the case of any transaction with respect to which the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met, for purposes of determining whether such transaction qualifies under subparagraph (D) of paragraph (1), the term ‘control’ has the meaning given to such term by section 304(c).”

    Enacted provision · exact public law section
    (2) D reorganizations.— Section 368(a)(2)(H) (relating to special rule for determining whether certain transactions are qualified under paragraph (1)(D)) is amended to read as follows: “(H) Special rules for determining whether certain transactions are qualified under paragraph (1)(d).— For purposes of determining whether a transaction qualifies under paragraph (1)(D)— “(i) in the case of a transaction with respect to which the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met, the term ‘control’ has the meaning given such term by section 304(c), and “(ii) in the case of a transaction with respect to which the requirements of section 355 are met, the shareholders described in paragraph (1)(D) shall be treated as having control of the corporation to which the assets are transferred if such shareholders own (immediately after the distribution) stock possessing— “(I) more than 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, and “(II) more than 50 percent of the total value of shares of all classes of stock of such corporation.”.

35. 1998

    Internal Revenue Service Restructuring and Reform Act of 1998

    Pub. L. 105–206 title VI § 6010(c)(3)(B) · 112 Stat. 685

    Amended · 26 U.S.C. § 368(a)(2)(H)(ii)

    Pub. L. 105–206 amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “in the case of a transaction with respect to which the requirements of section 355 are met, the shareholders described in paragraph (1)(D) shall be treated as having control of the corporation to which the assets are transferred if such shareholders own (immediately after the distribution) stock possessing—

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 105–206 amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “in the case of a transaction with respect to which the requirements of section 355 are met, the shareholders described in paragraph (1)(D) shall be treated as having control of the corporation to which the assets are transferred if such shareholders own (immediately after the distribution) stock possessing—

    “(I) more than 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, and “(II) more than 50 percent of the total value of shares of all classes of stock of such corporation.”

    Enacted provision · exact public law section
    (B) Clause (ii) of section 368(a)(2)(H) of the 1986 Code is amended to read as follows: “(ii) in the case of a transaction with respect to which the requirements of section 355 (or so much of section 356 as relates to section 355) are met, the fact that the shareholders of the distributing corporation dispose of part or all of the distributed stock shall not be taken into account.”.

36. 1998

    Pub. L. 105–277 div. J title IV § 4003(f)(2) · 112 Stat. 2681

    Inserted · 26 U.S.C. § 368(a)(2)(H)(ii)

    Pub. L. 105–277 inserted “, or the fact that the corporation whose stock was distributed issues additional stock,” after “dispose of part or all of the distributed stock”

    Source evidence

    Code amendment note
    Subsec. (a)(2)(H)(ii). Pub. L. 105–277 inserted “, or the fact that the corporation whose stock was distributed issues additional stock,” after “dispose of part or all of the distributed stock”.

    Enacted provision · exact public law section
    (2) Clause (ii) of section 368(a)(2)(H) of the 1986 Code, as amended by section 6010(c) of the 1998 Act, is amended by inserting “, or the fact that the corporation whose stock was distributed issues additional stock,” after “dispose of part or all of the distributed stock”.

37. 1999

    Miscellaneous Trade and Technical Corrections Act of 1999

    Pub. L. 106–36 § 3001(a)(3)(A) · 113 Stat. 127

    Struck · 26 U.S.C. § 368(a)(1)(C)

    Pub. L. 106–36, § 3001(a)(3)(A), struck out “, or the fact that property acquired is subject to a liability,” before “shall be disregarded”

    Source evidence

    Code amendment note
    Subsec. (a)(1)(C). Pub. L. 106–36, § 3001(a)(3)(A), struck out “, or the fact that property acquired is subject to a liability,” before “shall be disregarded”.

    Enacted provision · exact public law section
    (A) Section 368(a)(1)(C) of such Code is amended by 26 USC 368. striking “, or the fact that property acquired is subject to a liability,”.

    Effective date note
    Amendment by Pub. L. 106–36 applicable to transfers after Oct. 18, 1998, see section 3001(e) of Pub. L. 106–36, set out as a note under section 351 of this title.

38. 1999

    Miscellaneous Trade and Technical Corrections Act of 1999

    Pub. L. 106–36 § 3001(a)(3)(B) · 113 Stat. 127

    Struck · 26 U.S.C. § 368(a)(2)(B)

    Pub. L. 106–36, § 3001(a)(3)(B), which directed amendment of concluding provisions by striking out “, and the amount of any liability to which any property acquired from the acquiring corporation is subject,”, was executed by striking out “, and the amount of any liability to which any property acquired by the acquiring corporation is subject,” after “acquiring corporation”, to reflect the probable intent of Congress

    Source evidence

    Code amendment note
    Subsec. (a)(2)(B). Pub. L. 106–36, § 3001(a)(3)(B), which directed amendment of concluding provisions by striking out “, and the amount of any liability to which any property acquired from the acquiring corporation is subject,”, was executed by striking out “, and the amount of any liability to which any property acquired by the acquiring corporation is subject,” after “acquiring corporation”, to reflect the probable intent of Congress.

    Enacted provision · exact public law section
    (B) The last sentence of section 368(a)(2)(B) of such Code is amended by striking “, and the amount of any liability to which any property acquired from the acquiring corporation is subject,”.

    Effective date note
    Amendment by Pub. L. 106–36 applicable to transfers after Oct. 18, 1998, see section 3001(e) of Pub. L. 106–36, set out as a note under section 351 of this title.

39. 2018

    Energy and Water Development and Related Agencies Appropriations Act, 2018

    Pub. L. 115–141 div. U title IV § 401(a)(68) · 132 Stat. 348

    Substituted · 26 U.S.C. § 368(a)(2)(F)(vii)

    Pub. L. 115–141 substituted “(15 U.S.C. 80a–2(a)(36))” for “(15 U.S.C. 80a–2(36))”

    Source evidence

    Code amendment note
    Subsec. (a)(2)(F)(vii). Pub. L. 115–141 substituted “(15 U.S.C. 80a–2(a)(36))” for “(15 U.S.C. 80a–2(36))”.

    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.

45 of 50 references resolved to an enrolled provision · 5 partial