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TITLE 26-INTERNAL REVENUE CODE SECTION REFEIUED TO IN OTHER SECTIONS This section Is referred to in section 1016 of this title. § 269. Acquisitions made to evade or avoid income tax (a) In general If- (1) any person or persons acquire, or ac- quired on or after October 8, 1940, directly or indirectly, control of a corporation, or (2) any corporation acquires, or acquired on or after October 8, 1940, directly or indirectly, property of another corporation, not con- trolled, directly or indirectly, immediately before such acquisition, by such acquiring corporation or its stockholders, the basis of which property, in the hands of the acquiring corporation, is determined by reference to the basis in the hands of the transferor corpora- tion, and the principal purpose for which such acqui- sition was made is evasion or avoidance of Fed- eral income tax by securing the benefit of a de- duction, credit, or other allowance which such person or corporation would not otherwise enjoy, then the Secretary may disallow such de- duction, credit, or other allowance. For pur- poses of paragraphs (1) and (2), control means the ownership of stock possessing at least 50 percent of 'the total combined voting power of all classes of stock entitled to vote or at least 50 percent of the total value of shares of all classes of stock of the corporation. (b) Power of Secretary to allow deduction, etc., in part In any case to which subsection (a) applies the Secretary Is authorized- (1) to allow as a deduction, credit, or allowance any part of any amount disallowed by such subsection, if he determines that such allowance will not result in the evasion or avoidance of Federal income tax for which the acquisition was made; or (2) to distribute, apportion, or allocate gross income, and distribute, apportion, or allocate the deductions, credits, or allowances the benefit of which was sought to be secured, be- tween or among the corporations, or proper- ties, or parts thereof, involved, and to allow such deductions, credits, or allowances so dis- tributed, apportioned, or allocated, but to give effect to such allowance only to such extent as he determines will not result in the evasion or avoidance of Federal income tax for which the acquisition was made; or (3) to exercise his powers in part under paragraph (1) and in part under paragraph (2). (Aug. 16, 1954, ch. 736, 68A Stat. 80; Feb. 26, 1964, Pub. L. 88-272, title II, § 235(c)(2), 78 Stat. 126; Oct. 4, 1976, Pub. L. 94-455, title XIX, §§1901(a)(38), 1906(b)(13)(A), 90 Stat. 1771, 1834.) AMENDMENTS 1976-Subsecs. (a), (b). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary" wherever appearing. Subsec. (c). Pub. L. 94-455, § 1901(a)(38), struck out subsec. (c) relating to presumptions in the case of dis- proportionate purchase price. 1964-Subsec. (a). Pub. L. 88-272 substituted "the Secretary or his delegate may disallow such deduction, credit, or other allowance" for "such deduction, credit or other allowance shall not be allowed". Er crivE DATE OF 1964 AENDMENT Amendment by Pub. L. 88-272 applicable to taxable years ending after Dec. 31, 1963, see section 235(d) of Pub. L. 88-272 set out as an Effective Date of 1964 Amendment note under section 1551 of this title. CROSS REFERENCES Disallowance of surtax exemption and accumulated earnings credit, see section 1551 of this title. SECTION REFEIUED TO IN OTHER SECTIONS This section is referred to In section 1551 of this title. [§270. Repealed. Pub. L. 91-172, title II, § 213(b), Dec. 30, 1969, 83 Stat. 572] Section, act Aug. 16, 1954, ch. 736, 68A Stat. 81, re- lated to the limitation on deductions allowable to cer- tain individuals. See section 183 of this title. EFFECTIVE DATE OF REPEAL Repeal of section applicable to taxable years begin- ning after Dec. 31, 1969, see section 213(d) of Pub. L. 91-172, set out as an Effective Date note under section 183 of this title. § 271. Debts owed by political parties, etc. (a) General rule In the case of a taxpayer (other than a bank as defined in section 581) no deduction shall be allowed under section 166 (relating to bad debts) or under section 165(g) (relating to worthlessness of securities) by reason of the worthlessness of any debt owed by a political party. (b) Definitions (1) Political party For purposes of subsection (a, the term "political party" means- (A) a political party; (B) a national, State, or local committee of a political party; or (C) a committee, association, or organiza- tion which accepts contributions or makes expenditures for the purpose of influencing or attempting to influence the election of presidential or vice-presidential electors or of any individual whose name is presented for election to any Federal, State, or local elective public office, whether or not such individual is elected. (2) Contributions For purposes of paragraph (1)(C), the term "contributions" includes a gift, subscription, loan, advance, or deposit, of money, or any- thing of value, and includes a contract, prom- ise, or agreement to make a contribution, whether or not legally enforceable. (3) Expenditures For purposes of paragraph (1)(C), the term "expenditures" includes a payment, distribu- tion, loan, advance, deposit, or gift, of money, or anything of value, and includes a contract, promise, or agreement to make an expendi- ture, whether or not legally enforceable. § 269 Page 216