§ 453B. Gain or loss on disposition of installment obligations

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. 1980

   Pub. L. 96–471 § 2(a) · 94 Stat. 2247

   Enacted · 26 U.S.C. § 453B

   Added Pub. L. 96–471, § 2(a), Oct. 19, 1980, 94 Stat. 2252

   Source evidence

   Code source credit
   Added Pub. L. 96–471, § 2(a), Oct. 19, 1980, 94 Stat. 2252

   Enacted provision · exact public law section
   (a) General Rule.— Subpart B of part II of subchapter E of chapter 1 is amended by striking out section 453 and inserting in lieu thereof the following new sections: “SEC. 453. INSTALLMENT METHOD. “(a) General Rule.— Except as otherwise provided in this section, income from an installment sale shall be taken into account for purposes of this title under the installment method. “(b) Installment Sale Defined.— For purposes of this section— “Installment sale.” “(1) In general.— The term ‘installment sale’ means a disposition of property where at least 1 payment is to be received after the close of the taxable year in which the disposition occurs. “(2) Exceptions.—The term ‘installment sale’ does not include— “(A) Dealer disposition of personal property.— A disposition of personal property on the installment plan by a person who regularly sells or otherwise disposes of personal property on the installment plan. “(B) Inventories of personal property.— A disposition of personal property of a kind which is required to be included in the inventory of the taxpayer if on hand at the close of the taxable year. “(c) Installment Method Defined.— For purposes of this section, “Installment method.” the term ‘installment method’ means a method under which the income recognized for any taxable year from a disposition is that proportion of the payments received in that year which the gross profit (realized or to be realized when payment is completed) bears to the total contract price. “(d) Election Out.— “(1) In general.— Subsection (a) shall not apply to any disposition if the taxpayer elects to have subsection (a) not apply to such disposition. “(2) Time and manner for making election.— Except as otherwise provided by regulations, an election under paragraph (1) with respect to a disposition may be made only on or before the due date prescribed by law (including extensions) for filing the taxpayer’s return of the tax imposed by this chapter for the taxable year in which the disposition occurs. Such an election shall be made in the manner prescribed by regulations. “(3) Election revocable only with consent.— An election under paragraph (1) with respect to any disposition may be revoked only with the consent of the Secretary. “(e) Second Dispositions by Related Persons.— “(1) In general.— If— “(A) any person disposes of property to a related person (hereinafter in this subsection referred to as the ‘first disposition’), and “(B) before the person making the first disposition receives all payments with respect to such disposition, the related person disposes of the property (hereinafter in this subsection referred to as the ‘second disposition’), then, for purposes of this section, the amount realized with respect to such second disposition shall be treated as received at the time of the second disposition by the person making the first disposition. “(2) 2-year cutoff for property other than marketable securities.— “(A) In general.— Except in the case of marketable securities, paragraph (1) shall apply only if the date of the second disposition is not more than 2 years after the date of the first disposition. “(B) Substantial diminishing of risk of ownership.— The running of the 2-year period set forth in subparagraph (A) shall be suspended with respect to any property for any period during which the related person’s risk of loss with respect to the property is substantially diminished by— “(i) the holding of a put with respect to such property (or similar property), “(ii) the holding by another person of a right to acquire the property, or “(iii) a short sale or any other transaction. “(3) Limitation on amount treated as received.— The amount treated for any taxable year as received by the person making the first disposition by reason of paragraph (1) shall not exceed the excess of— “(A) the lesser of— “(i) the total amount realized with respect to any second disposition of the property occurring before the close of the taxable year, or “(ii) the total contract price for the first disposition, over “(B) the sum of— “(i) the aggregate amount of payments received with respect to the first disposition before the close of such year, plus “(ii) the aggregate amount treated as received with respect to the first disposition for prior taxable years by reason of this subsection. “(4) Fair market value where disposition is not sale or exchange.— For purposes of this subsection, if the second dispo-sition is not a sale or exchange, an amount equal to the fair market value of the property disposed of shall be substituted for the amount realized. “(5) Later payments treated as receipt of tax paid amounts.— If paragraph (1) applies for any taxable year, payments received in subsequent taxable years by the person making the first disposition shall not be treated as the receipt of payments with respect to the first disposition to the extent that the aggregate of such payments does not exceed the amount treated as received by reason of paragraph (1). “(6) Exception for certain dispositions.— For purposes of this subsection— “(A) Reacquisitions of stock by issuing corporation not treated as first dispositions.— Any sale or exchange of stock to the issuing corporation shall not be treated as a first disposition. “(B) Involuntary conversions not treated as second dispositions.— A compulsory or involuntary conversion (within the meaning of section 1033) and any transfer 26 USC 1033. thereafter shall not be treated as a second disposition if the first disposition occurred before the threat or imminence of the conversion. “(C) Dispositions after death.— Any transfer after the earlier of— “(i) the death of the person making the first disposition, or “(ii) the death of the person acquiring the property in the first disposition, and any transfer thereafter shall not be treated as a second disposition. “(7) Exception where tax avoidance not a principal purpose.— This subsection shall not apply to a second disposition (and any transfer thereafter) if it is established to the satisfaction of the Secretary that neither the first disposition nor the second disposition had as one of its principal purposes the avoidance of Federal income tax. “(8) Extension of statute of limitations.— The period for assessing a deficiency with respect to a first disposition (to the extent such deficiency is attributable to the application of this subsection) shall not expire before the day which is 2 years after the date on which the person making the first disposition furnishes (in such manner as the Secretary may by regulations prescribe) a notice that there was a second disposition of the property to which this subsection may have applied. Such deficiency may be assessed notwithstanding the provisions of any law or rule of law which would otherwise prevent such assessment. “(f) Definitions and Special Rules.— For purposes of this section— “(1) Related person.— Except for purposes of subsections (g) and (h), the term ‘related person’ means a person whose stock would be attributed under section 318(a) (other than paragraph 26 USC 318. (4) thereof) to the person first disposing of the property. “(2) Marketable securities.— The term ‘marketable securities’ means any security for which, as of the date of the disposition, there was a market on an established securities market or otherwise. “(3) Payment.— Except as provided in paragraph (4), the term ‘payment’ does not include the receipt of evidences of indebtedness of the person acquiring the property (whether or not payment of such indebtedness is guaranteed by another person). “(4) Purchaser evidences of indebtedness payable on demand or readily tradable.— Receipt of a bond or other evidence of indebtedness which— “(A) is payable on demand, or “(B) is issued by a corporation or a government or political subdivision thereof and is readily tradable, shall be treated as receipt of payment. “(5) Readily tradable defined.— For purposes of paragraph (4), the term ‘readily tradable’ means a bond or other evidence of indebtedness which is issued— “(A) with interest coupons attached or in registered form (other than one in registered form which the taxpayer establishes will not be readily tradable in an established securities market), or “(B) in any other form designed to render such bond or other evidence of indebtedness readily tradable in an established securities market. “(6) Like-kind exchanges.— In the case of any exchange described in section 1031(b)— “(A) the total contract price shall be reduced to take into account the amount of any property permitted to be received in such exchange without recognition of gain, “(B) the gross profit from such exchange shall be reduced to take into account any amount not recognized by reason of section 1031(b), and “(C) the term ‘payment’ shall not include any property permitted to be received in such exchange without recognition of gain. 26 USC 356. Similar rules shall apply in the case of an exchange which is described in section 356(a) and is not treated as a dividend. “(7) Depreciable property.— The term ‘depreciable property’ means property of a character which (in the hands of the transferee) is subject to the allowance for depreciation provided 26 USC 167. in section 167. “(g) Sale of Depreciable Property to Spouse or 80-Percent Owned Entity.— “(1) In general.— In the case of an installment sale of depreciable property between related persons within the meaning of Post, p. 2255. section 1239(b), subsection (a) shall not apply, and, for purposes of this title, all payments to be received shall be deemed received in the year of the disposition. “(2) Exception where tax avoidance not a principal purpose.— Paragraph (1) shall not apply if it is established to the satisfaction of the Secretary that the disposition did not have as one of its principal purposes the avoidance of Federal income tax. “(h) Use of Installment Method by Shareholders in Section 337 Liquidations.— “(1) Receipt of obligations not treated as receipt of Payment.— “(A) In general.— If, in connection with a liquidation to which section 337 applies, in a transaction to which section 26 USC 331. 331 applies the shareholder receives (in exchange for the shareholder’s stock) an installment obligation acquired in respect of a sale or exchange by the corporation during the 12-month period set forth in section 337(a), then, for purposes 26 USC 337. of this section, the receipt of payments under such obligation (but not the receipt of such obligation) by the shareholder shall be treated as the receipt of payment for the stock. “(B) Obligations attributable to sale of inventory must result from bulk sale.— Subparagraph (A) shall not apply to an installment obligation described in section 337(b)(1)(B) unless such obligation is also described in section 337(b)(2)(B). “(C) Special rule where obligor and shareholder are related persons.— If the obligor of any installment obligation and the shareholder are related persons (within the meaning of section 1239(b)), to the extent such installment Post, p. 2255. obligation is attributable to the disposition by the corporation of depreciable property— “(i) subparagraph (A) shall not apply to such obligation, and “(ii) for purposes of this title, all payments to be received by the shareholder shall be deemed received in the year the shareholder receives the obligation. “(D) Coordination with subsection (e)(1)(A).— For purposes of subsection (e)(2)(A), disposition of property by the corporation shall be treated also as disposition of such property by the shareholder. “(E) Sales by liquidating subsidiary.— For purposes of subparagraph (A), in any case to which section 337(c)(3) 26 USC 337. applies, an obligation acquired in respect of a sale or exchange by the selling corporation shall be treated as so acquired by the corporation distributing the obligation to the shareholder. “(2) Distributions received in more than 1 taxable year of shareholder.— If— “(A) paragraph (1) applies with respect to any installment obligation received by a shareholder from a corporation, and “(B) by reason of the liquidation such shareholder receives property in more than 1 taxable year, then, on completion of the liquidation, basis previously allocated to property so received shall be reallocated for all such taxable years so that the shareholder’s basis in the stock of the corporation is properly allocated among all property received by such shareholder in such liquidation. “(i) Regulations.— “(1) In general.— The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the provisions of this section. “(2) Selling price not readily ascertainable.— The regulations prescribed under paragraph (1) shall include regulations providing for ratable basis recovery in transactions where the gross profit or the total contract price (or both) cannot be readily ascertained. “SEC. 453A. INSTALLMENT METHOD FOR DEALERS IN PERSONAL PROPERTY. “(a) General Rule.— “(1) In general.— Under regulations prescribed by the Secretary, a person who regularly sells or otherwise disposes of personal property on the installment plan may return as income therefrom in any taxable year that proportion of the installment payments actually received in that year which the gross profit, realized or to be realized when payment is completed, bears to the total contract price. “(2) Total contract price.— For purposes of paragraph (1), the total contract price of all sales of personal property on the installment plan includes the amount of carrying charges or interest which is determined with respect to such sales and is added on the books of account of the seller to the established cash selling price of such property. This paragraph shall not apply with respect to sales of personal property under a revolving credit type plan. “(b) Carrying Charges Not Included in Total Contract Price.— If the carrying charges or interest with respect to sales of personal property, the income from which is returned under subsection (a)(1), is not included in the total contract price, payments received with respect to such sales shall be treated as applying first against such carrying charges or interest. “SEC. 453B. GAIN OR LOSS DISPOSITION OF INSTALLMENT OBLIGATIONS. “(a) General Rule.— If an installment obligation is satisfied at other than its face value or distributed, transmitted, sold, or otherwise disposed of, gain or loss shall result to the extent of the difference between the basis of the obligation and— “(1) the amount realized, in the case of satisfaction at other than face value or a sale or exchange, or “(2) the fair market value of the obligation at the time of distribution, transmission, or disposition, in the case of the distribution, transmission, or disposition otherwise than by sale or exchange. any gain or loss so resulting shall be considered as resulting from the sale or exchange of the property in respect of which the installment obligation was received. “(b) Basis of Obligation.— The basis of an installment obligation shall be the excess of the face value of the obligation over an amount equal to the income which would be returnable were the obligation satisfied in full. “(c) Special Rule for Transmission at Death.— Except as provided in section 691 (relating to recipients of income in respect of decedents), this section shall not apply to the transmission of installment obligations at death. “(d) Effect of Distribution in Certain Liquidations.— “(1) Liquidations to which section 332 applies.— If— “(A) an installment obligation is distributed in a liquidation to which section 332 (relating to complete liquidations of subsidiaries) applies, and “(B) the basis of such obligation in the hands of the 26 USC 334. distributee is determined under section 334(b)(1), then no gain or loss with respect to the distribution of such obligation shall be recognized by the distributing corporation. “(2) Liquidations to which section 337 applies.— If— “(A) an installment obligation is distributed by a corporation in the course of a liquidation, and “(B) under section 337 (relating to gain or loss on sales or exchanges in connection with certain liquidations) no gain or loss would have been recognized to the corporation if the corporation had sold or exchanged such installment obligation on the day of such distribution, then no gain or loss shall be recognized to such corporation by reason of such distribution. The preceding sentence shall not apply to the extent that under paragraph (1) gain to the distributing corporation would be considered as gain to which section 341(f), 617(d)(1), 1245(a), 1250(a), 1251(c), 1252(a), or 1254(a) 26 USC 341, 617, 1245, 1250–1252, 1254. applies. “(e) Life Insurance Companies.— “(1) In general.— In the case of a disposition of an installment obligation by any person other than a life insurance company (as defined in section 801(a)) to such an insurance company or to a 26 USC 801. partnership of which such an insurance company is a partner, no provision of this subtitle providing for the nonrecognition of gain shall apply with respect to any gain resulting under subsection (a). If a corporation which is a life insurance company for the taxable year was (for the preceding taxable year) a corporation which was not a life insurance company, such corporation shall, for purposes of this subsection and subsection (a), be treated as having transferred to a life insurance company, on the last day of the preceding taxable year, all installment obligations which it held on such last day. A partnership of which a life insurance company becomes a partner shall, for purposes of this subsection and subsection (a), be treated as having transferred to a life insurance company, on the last day of the preceding taxable year of such partnership, all installment obligations which it holds at the time such insurance company becomes a partner. “(2) Special rule where life insurance company elects to treat income as investment income.— Paragraph (1) shall not apply to any transfer or deemed transfer of an installment obligation if the life insurance company elects (at such time and in such manner as the Secretary may by regulations prescribe) to determine its life insurance company taxable income— “(A) by returning the income on such installment obligation under the installment method prescribed in section 453, Ante, p. 2247. and “(B) if such income would not otherwise be returnable as an item referred to in section 804(b) or as long-term capital 26 USC 804. gain, as if the income on such obligations were income specified in section 804(b). “(f) Obligation Becomes Unenforceable.— For purposes of this section, if any installment obligation is canceled or otherwise becomes unenforceable— “(1) the obligation shall be treated as if it were disposed of in a transaction other than a sale or exchange, and “(2) if the obligor and obligee are related persons (within the meaning of section 453(f)(1)), the fair market value of the obligation Ante, p. 2247. shall be treated as not less than its face amount.”.

2. 1980

   Pub. L. 96–471 § 2(c)(3) · 94 Stat. 2247

   Inserted · 26 U.S.C. § 453B(d)

   Pub. L. 96–471, § 2(c)(3), inserted last sentence providing that in the case of any installment obligation which would have met the requirements of subpars. (A) and (B) of par. (2) but for sections 337(f), gain shall be recognized to such corporation by reason of such distribution only to the extent gain would have been recognized under sections 337(f) if such corporation had sold or exchanged such installment obligation on the date of such distribution

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 96–471, § 2(c)(3), inserted last sentence providing that in the case of any installment obligation which would have met the requirements of subpars. (A) and (B) of par. (2) but for sections 337(f), gain shall be recognized to such corporation by reason of such distribution only to the extent gain would have been recognized under sections 337(f) if such corporation had sold or exchanged such installment obligation on the date of such distribution.

   Enacted provision · exact public law section
   (3) Paragraph (2) of section 453B(d) is amended by adding at the end thereof the following new sentence: “In the case of any installment obligation which would have met the requirements of subparagraphs (A) and (B) of the first sentence of this paragraph but for section 337(f), gain shall be recognized to such corporation by reason of such distribution only to the extent gain would have been recognized under section 337(f) if such corporation had sold or exchanged such installment obligation on the date of such distribution. .

3. 1983

   Pub. L. 97–448 title III § 302 · 96 Stat. 2365

   Substituted · 26 U.S.C. § 453B(d)(2)

   Pub. L. 97–448 substituted “under subsection (a)” for “under paragraph (1)” in second sentence

   Source evidence

   Code amendment note
   Subsec. (d)(2). Pub. L. 97–448 substituted “under subsection (a)” for “under paragraph (1)” in second sentence.

   Enacted provision · exact public law section
   SEC. 302. CORRECTION OF CLERICAL ERROR IN SECTION 453B(d)(2). 26 USC 453B. Paragraph (2) of section 453B(d) (relating to liquidations to which section 337 applies) is amended by striking out “to the extent that under paragraph (1)” and inserting in lieu thereof “to the extent that under subsection (a)”.

4. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 § 492(b)(3) · 98 Stat. 494

   Struck · 26 U.S.C. § 453B(d)(2)

   Pub. L. 98–369, § 492(b)(3), struck out “1251(c),” after “1250(a),” in provision following subpar. (B)

   Source evidence

   Code amendment note
   Subsec. (d)(2). Pub. L. 98–369, § 492(b)(3), struck out “1251(c),” after “1250(a),” in provision following subpar. (B).

   Enacted provision · exact public law section
   (3) Section 453b.— The second sentence of section 453B(d)(2) (relating to liquidations to which section 337 applies) is amended by striking out “1251(c),”.

5. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 § 43(c)(2) · 98 Stat. 494

   Substituted · 26 U.S.C. § 453B(d)(2)

   Pub. L. 98–369, § 43(c)(2), substituted “1254(a), or 1276(a)” for “or 1254(a)”

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 98–369, § 43(c)(2), substituted “1254(a), or 1276(a)” for “or 1254(a)”.

   Enacted provision · exact public law section
   SEC. 43. TECHNICAL AND CONFORMING AMENDMENTS RELATED TO TREATMENT OF MARKET DISCOUNT AND ACQUISITION DISCOUNT. (a) Definition of Substituted Basis Property; Etc.— (1) In general.— Section 7701(a) (relating to definitions) is amended by adding at the end thereof the following new paragraphs: “(42) Substituted basis property.— The term ‘substituted basis property’ means property which is— “(A) transferred basis property, or “(B) exchanged basis property. “(43) Transferred basis property.— The term ‘transferred basis property’ means property having a basis determined under any provision of subtitle A (or under any corresponding provision of prior income tax law) providing that the basis shall be determined in whole or in part by reference to the basis in the hands of the donor, grantor, or other transferor. “(44) Exchanged basis property.— The term ‘exchanged basis property’ means property having a basis determined under any provision of subtitle A (or under any corresponding provision of prior income tax law) providing that the basis shall be determined in whole or in part by reference to other property held at any time by the person for whom the basis is to be determined. “(45) Nonrecognition transaction.— The term ‘nonrecognition transaction’ means any disposition of property in a transaction in which gain or loss is not recognized in whole or in part for purposes of subtitle A.” (2) Technical amendment.— Subsection (b) of section 1016 is amended by striking out the last sentence. (b) Elections Made in Manner Prescribed by Secretary.— Section 7805 (relating to rules and regulations) is amended by adding at the end thereof the following new subsection: “(d) Manner of Making Elections Prescribed by Secretary.— Except to the extent otherwise provided by this title, any election under this title shall be made at such time and in such manner as the Secretary shall by regulations or forms prescribe.” (c) Other Technical Amendments.— (1) Paragraph (12) of section 341(e) (related to nonapplication of section 1254(a)) is amended by striking out “and 1254(a)” and inserting in lieu thereof “1254(a), and 1276(a)”. (2) Paragraph (2) of section 453B(d) (relating to liquidations to which section 337 applies) is amended by striking out “or 1254(a)” and inserting in lieu thereof “1254(a), or 1276(a)”. (3) Subsection (c) of section 751 (defining unrealized receivables) is amended by adding at the end thereof the following new sentence: “For purposes of this section and sections 731, 736, and 741, such term also includes any market discount bond (as defined in section 1278) and any short-term obligation Ante, p. 547. Ante, p. 549. (as defined in section 1283) but only to the extent of the amount which would be treated as ordinary income if (at the time of the transaction described in this section or section 731, 736, or 741, as the case may be) such property had been sold by the partnership.”

6. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 § 211(b)(6)(A) · 98 Stat. 494

   Substituted · 26 U.S.C. § 453B(e)(1)

   Pub. L. 98–369, § 211(b)(6)(A), substituted “section 816(a)” for “section 801(a)”

   Source evidence

   Code amendment note
   Subsec. (e)(1). Pub. L. 98–369, § 211(b)(6)(A), substituted “section 816(a)” for “section 801(a)”.

   Enacted provision · exact public law section
   (A) Paragraph (1) of section 453B(e) (relating to life insurance companies) is amended by striking out “section 801(a)” and inserting in lieu thereof “section 816(a)”.

7. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 § 211(b)(6)(B) · 98 Stat. 494

   1. Substituted · 26 U.S.C. § 453B(e)(2)

      Pub. L. 98–369, § 211(b)(6)(B), substituted “as not related to insurance business” for “as investment income”

   2. Substituted · 26 U.S.C. § 453B(e)(2)

      Pub. L. 98–369, § 211(b)(6)(B), substituted “as if such income were an item attributable to a noninsurance business (as defined in section 806(c)(3))” for “if such income would not otherwise be returnable as an item referred to in section 804(b) or as long-term capital gain, as if the income on such obligations were income specified in section 804(b)”

   Source evidence

   Code amendment note
   Subsec. (e)(2). Pub. L. 98–369, § 211(b)(6)(B), substituted “as not related to insurance business” for “as investment income” in heading, and in text substituted “as if such income were an item attributable to a noninsurance business (as defined in section 806(c)(3))” for “if such income would not otherwise be returnable as an item referred to in section 804(b) or as long-term capital gain, as if the income on such obligations were income specified in section 804(b)”.

   Enacted provision · exact public law section
   (B) Paragraph (2) of section 453B(e) is amended to read as 26 USC 453B. follows: “(2) Special rule where life insurance company elects to treat income as not related to insurance business.— Paragraph (1) shall not apply to any transfer or deemed transfer of an installment obligation if the life insurance company elects (at such time and in such manner as the Secretary may by regulations prescribe) to determine its life insurance company taxable income— “(A) by returning the income on such installment obligation under the installment method prescribed in section 453, and “(B) as if such income were an item attributable to a noninsurance business (as defined in section 806(c)(3)). Ante, p. 724. 26 USC 542. ”

8. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 § 421(b)(3) · 98 Stat. 494

   Added · 26 U.S.C. § 453B(g)

   Pub. L. 98–369, § 421(b)(3), added subsec. (g)

   Source evidence

   Code amendment note
   Subsec. (g). Pub. L. 98–369, § 421(b)(3), added subsec. (g).

   Enacted provision · exact public law section
   (3) Coordination with section 453b.— Section 453B (relating to gain or loss on disposition of installment obligations) is amended by adding at the end thereof the following new subsection: “(g) Transfers Between Spouses or Incident to Divorce.— In Ante, p. 793. the case of any transfer described in subsection (a) of section 1041— “(1) subsection (a) of this section shall not apply, and “(2) the same tax treatment with respect to the transferred installment obligation shall apply to the transferee as would have applied to the transferor.”

9. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 § 631(e)(9) · 100 Stat. 2085

   1. Amended · 26 U.S.C. § 453B(d)

      Pub. L. 99–514, § 631(e)(9), amended subsec. (d) generally

   2. Substituted · 26 U.S.C. § 453B(d)

      Pub. L. 99–514, § 631(e)(9), substituting “liquidations to which section 332 applies” for “certain liquidations” in heading

   3. Struck · 26 U.S.C. § 453B(d)

      Pub. L. 99–514, § 631(e)(9), striking out par. (1) designation

   4. Redesignated · 26 U.S.C. § 453B(d)

      Pub. L. 99–514, § 631(e)(9), redesignating subpars. (A) and (B) as pars. (1) and (2)

   5. Struck · 26 U.S.C. § 453B(d)

      Pub. L. 99–514, § 631(e)(9), striking out former par. (2) relating to liquidations to which section 337 applies

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 99–514, § 631(e)(9), amended subsec. (d) generally, substituting “liquidations to which section 332 applies” for “certain liquidations” in heading, striking out par. (1) designation, redesignating subpars. (A) and (B) as pars. (1) and (2), and striking out former par. (2) relating to liquidations to which section 337 applies.

   Enacted provision · exact public law section
   (9) Subsection (d) of section 453B is amended to read as follows: “(d) Effect of Distribution in Liquidations to Which Section 332 Applies.— If— “(1) an installment obligation is distributed in a liquidation to which section 332 (relating to complete liquidations of subsidiaries) applies, and “(2) the basis of such obligation in the hands of the distributee is determined under section 334(b)(1), then no gain or loss with respect to the distribution of such obligation shall be recognized by the distributing corporation.”

10. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1011(b)(1) · 100 Stat. 2085

    Substituted · 26 U.S.C. § 453B(e)(2)(B)

    Pub. L. 99–514, § 1011(b)(1), substituted “section 806(b)(3)” for “section 806(c)(3)”

    Source evidence

    Code amendment note
    Subsec. (e)(2)(B). Pub. L. 99–514, § 1011(b)(1), substituted “section 806(b)(3)” for “section 806(c)(3)”.

    Enacted provision · exact public law section
    (1) Sections 453B(e)(2)(B) and 465(c)(7)(D)(v) are each amended by striking out “section 806(c)(3)” and inserting in lieu thereof “section 806(b)(3)”.

11. 1986

    Tax Reform Act of 1986

    Pub. L. 99–514 § 1842(c) · 100 Stat. 2085

    Inserted · 26 U.S.C. § 453B(g)

    Pub. L. 99–514, § 1842(c), inserted “(other than a transfer in trust)”

    Source evidence

    Code amendment note
    Subsec. (g). Pub. L. 99–514, § 1842(c), inserted “(other than a transfer in trust)”.

    Enacted provision · exact public law section
    (c) Treatment of Certain Transfers in Trust.— Subsection (g) of section 453B (relating to transfers between spouses, or incident to divorce) is amended by striking out “section 1041” and inserting in lieu thereof “section 1041 (other than a transfer in trust)”.

12. 1988

    Technical and Miscellaneous Revenue Act of 1988

    Pub. L. 100–647 title I § 1006(e)(22) · 102 Stat. 3342

    Added · 26 U.S.C. § 453B(h)

    Pub. L. 100–647 added subsec. (h)

    Source evidence

    Code amendment note
    Subsec. (h). Pub. L. 100–647 added subsec. (h).

    Enacted provision · exact public law section
    (22) Section 453B of the 1986 Code is amended by adding at the end thereof the following new subsection: “(h) Certain Liquidating Distributions by S Corporations.— If— “(1) an installment obligation is distributed by an S corporation in a complete liquidation, and “(2) receipt of the obligation is not treated as payment for the stock by reason of section 453(h)(1), then, except for purposes of any tax imposed by subchapter S, no gain or loss with respect to the distribution of the obligation shall be recognized by the distributing corporation. Under regulations prescribed by the Secretary, the character of the gain or loss to the shareholder shall be determined in accordance with the principles of section 1366(b).”

13. 1990

    Revenue Reconciliation Act of 1990

    Pub. L. 101–508 title XI § 11702(a)(2) · 104 Stat. 1388

    1. Substituted · 26 U.S.C. § 453B(d)

       Pub. L. 101–508 substituted heading for one which read: “Effect of distribution in liquidations to which section 332 applies”

    2. Amended · 26 U.S.C. § 453B(d)

       Pub. L. 101–508 amended text generally. Prior to amendment, text read as follows: “If—

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 101–508 substituted heading for one which read: “Effect of distribution in liquidations to which section 332 applies” and amended text generally. Prior to amendment, text read as follows: “If—

    “(1) an installment obligation is distributed in a liquidation to which section 332 (relating to complete liquidations of subsidiaries) applies, and “(2) the basis of such obligation in the hands of the distributee is determined under section 334(b)(1), then no gain or loss with respect to the distribution of such obligation shall be recognized by the distributing corporation.”

    Enacted provision · exact public law section
    (2) Subsection (d) of section 453B is amended to read as follows: “(d) Exception for Distributions to Which Section 337(a) Applies.— Subsection (a) shall not apply to any distribution to which section 337(a) applies.”

14. 2017

    Pub. L. 115–97 § 13512(b)(1)(A) · 131 Stat. 2054

    Struck · 26 U.S.C. § 453B(e)(2)(B)

    Pub. L. 115–97, § 13512(b)(1)(A), struck out “(as defined in section 806(b)(3))” before period at end

    Source evidence

    Code amendment note
    Subsec. (e)(2)(B). Pub. L. 115–97, § 13512(b)(1)(A), struck out “(as defined in section 806(b)(3))” before period at end.

    Enacted provision · exact public law section
    (A) by striking “(as defined in section 806(b)(3))” in paragraph (2)(B), and

    Effective date note
    Pub. L. 115–97, title I, § 13512(c), Dec. 22, 2017, 131 Stat. 2143, provided that: “The amendments made by this section [amending this section and sections 465, 801, 804, 805, 842, and 953 of this title and repealing section 806 of this title] shall apply to taxable years beginning after December 31, 2017.”

15. 2017

    Pub. L. 115–97 § 13512(b)(1)(B) · 131 Stat. 2054

    Added · 26 U.S.C. § 453B(e)(3)

    Pub. L. 115–97, § 13512(b)(1)(B), added par. (3)

    Source evidence

    Code amendment note
    Subsec. (e)(3). Pub. L. 115–97, § 13512(b)(1)(B), added par. (3).

    Enacted provision · exact public law section
    (B) by adding at the end the following new paragraph: “(3) Noninsurance business.— “(A) In general.— For purposes of this subsection, the term ‘noninsurance business’ means any activity which is not an insurance business. “(B) Certain activities treated as insurance businesses.— For purposes of subparagraph (A), any activity which is not an insurance business shall be treated as an insurance business if— “(i) it is of a type traditionally carried on by life insurance companies for investment purposes, but only if the carrying on of such activity (other than in the case of real estate) does not constitute the active conduct of a trade or business, or “(ii) it involves the performance of administrative services in connection with plans providing life insurance, pension, or accident and health benefits.” .

    Effective date note
    Pub. L. 115–97, title I, § 13512(c), Dec. 22, 2017, 131 Stat. 2143, provided that: “The amendments made by this section [amending this section and sections 465, 801, 804, 805, 842, and 953 of this title and repealing section 806 of this title] shall apply to taxable years beginning after December 31, 2017.”

16. 2018

    Energy and Water Development and Related Agencies Appropriations Act, 2018

    Pub. L. 115–141 div. U title IV § 401(a)(111) · 132 Stat. 348

    Substituted · 26 U.S.C. § 453B

    Pub. L. 115–141 substituted “loss on disposition” for “loss disposition” in section catchline

    Source evidence

    Code amendment note
    Pub. L. 115–141 substituted “loss on disposition” for “loss disposition” in section catchline.

    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.

22 of 22 references resolved to an enrolled provision