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TITLE 26-INTERNAL REVENUE CODE REFERENCES IN TEXT The date of the enactment of this section, referred to in subsecs. (a)(2), (d)(2), refers to the date of enact- ment of Pub. L. 87-870, which was approved Oct. 23, 1962. The Interstate Commerce Act, referred to in subsec. (d)(1)(A), (B), is act Feb. 4, 1887, ch. 104, 24 Stat. 379, as amended. Part I of the Interstate Commerce Act is classified generally to chapter I (§ 1 et Feq.) of Title 49, Transportation. For complete classification of this Act to the Code, see note captioned Interstate Commerce Act set out under section 27 of Title 49 and Tables volume. AMENDMENTS 1976-Sub&ec. (d)(1)(A). Pub. L. 94-455, §1901(a) (40)(A), added "(49 U.S.C. 1 and following)" after "In- terstate Commerce Act". Subsec. (e). Pub. L. 94-455, §§ 1901(a)(40)(B), 1906(b)(13)(A), redesignated subsec. (f) as (e) and in subsec. (e) as so redesignated struck out "or his dele- gate" following "Secretary". Former subsec. (e), which made special provision for the application of this sec- tion to taxable years ending before Oct. 23, 1962, was struck out. Subsec. (f). Pub. L. 94-4.5, § 1901(a)(40)(B), redesig- nated subsec. (f) as (e). EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsecs. (d)(1)(A), (e), (f) by section 1901(a)(40) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. EFFECTIVE DATE Section 2(a) of Pub. L. 87-870 provided that: "The amendments made by the first section of this Act [en- acting this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954." INTERNAL REVENUE CODE OF 1939; INCLUSION OF TERmI- NAL RAILROAD CORPORATIONS AND THEIR SHAREHOLD- ERS PROVISION Section 2(b) of Pub. L. 87-870 provided that: "Provi- sions having the same effect as section 281 of the In- ternal Revenue Code of 1954 (as added by the first sec- tion of this Act) [this section] shall be deemed to be included in the Internal Revenue Code of 1939, effec- tive with respect to all taxable years to which such Code applies." Subchapter C-Corporate Distributions and Adjustments Part I. Distributions by corporations. II. Corporate liquidations. III. Corporate organizations and reorganizations. IV. Insolvency reorganizations. V. Carryovers. VI. Treatment of certain corporate interests as stock or Indebtedness. EVII. Repealed.] AMENDMENTS 1976-Pub. L. 94-455, title XIX, § 1901(b)(15), Oct. 4. 1976, 90 Stat. 1796 struck out Part VII "Effective date of subehapter C." 1969-Pub. L. 91-172, title IV, § 415(b), Dec. 30, 1969, 83 Stat. 614, redesignated former Part VI as Part VII and added Part VI. SUBCHAPTER REFERRED TO IN OTHER SECTIONS This subchapter is referred to in sections 997, 1011, 1012, 1016, 1081 of this title. PART I-DISTRIBUTIONS BY CORPORATIONS Subpart A. Effects on recipients. B. Effects on corporation. C. Definitions; constructive ownership of stock. SUBPART A-EFFECTS ON RECIPIENTS Sec. 301. Distributions of property. 302. Distributions in redemption of stock. .03. Distributions in redemption of stock to pay death taxes. 304. Redemption through use of related corporations. 305. Distributions of stock and stock rights. 306. Dispositions of certain stock. 307. Basis of stock and stock rights acquired in distri- butions. § 301. Distributions of property (a) In general Except as otheiwise provided in this chapter, a distribution of property (as defined in section 317(a)) made by a corporation to a shareholder with respect to its stock shall be treated in the manner provided in subsection (c). (b) Amount distributed (1) General rule For purposes of this section, the amount of any distribution shall be- (A) Noncorporate distributees If the shareholder is not a corporation, the amount of money received, plus the fair market value of the other property re- ceived. (B) Corporate distributees If the shareholder is a corporation, unless subparagraph (D) applies, the amount of money received, plus whichever of the fol- lowing is the lesser; (I) the fair market value of the other property received; or (ii) the adjusted basis (in the hands of the distributing corporation immediately before the distribution) of the other prop- erty received, increased in the amount of gain to the distributing corporation v. Ich is recognized under subsection (b), (c), or (d) of section 311, under section' 341.f), or under section 617(d)(1), 1245(a). 1250(a), 1251(c), 1252(a), or 1254(a). (C) Certain corporate dintributees of foreign cor- poration Notwithstanding subparagraph (B), if the shareholder is a corporation and the distrib- uting corporation is a foreign corporation, the amount taken into account with respect to property (other than money) shall be the fair market value of such property; except that if any deduction is allowable under sec- tion 245 with respect to such distribution, then the amount taken into account shall be the sum (determined under regulations prescribed by the Secretary) of- (I) the proportion of the adjusted basis of such property (or, if lower, Its fair market value) properly attributable to gross income which is effectively connect- ed with the conduct of a trade or business within the United States, and (ii) the proportion of the fair market value of such property properly attribut- 71-999 0 - 78 -17 (Vol. 7) Page 229