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TITLE 26-INTERNAL REVENUE CODE poration beginning after Dec. 31, 1963, see section 225(l) of Pub. L. 88-272, set out as an Effective Date of 1964 Amendment note under section 316 of this title. LIQUIDATIONS BEFORE JANUARY 1, 1966 Section 225(h) of Pub. L. 88-272 provided that in the case of corporations referred to in former subsec. (g)(3) of this section the amendments made by section 225 of Pub. L. 88-272 do not apply if there is a com- plete liquidation of such corporation and if the distri- bution of all the property under such liquidation occurs before Jan. 1, 1966, except for certain liquida- tions to which section 332 of this title applies. CROSS REFERENCES Distributions in redemption of stock, see section 302 of this title. Earnings and profits, special rule for partial liquida- tions, see section 312 of this title. Gain or loss on sales or exchanges in connection with certain liquidations, see section 337 of this title. Liquidations before Jan. 1, 1966, see section 225(h) of Pub. L. 88-272, set out as a note under section 333 of this title. SECTION REFERRED TO IN OTHER SECTIONS This sectin is referred to in sections 302, 1246, 1248, 1372, 6162 ot this title. § 332. Complete liquidations of subsidiaries (a) General rule No gain or loss shall be recognized on the re- ceipt by a corporation of property distributed in complete liquidation of another corporation. (b) Liquidations to which section applies For purposes of subsection (a), a distribution shall be considered to be in complete liquida- tion only if- (1) the corporation receiving such property was, on the date of the adoption of the plan of liquidation, and has continued to be at all times until the receipt of the property, the owner of stock (in such other coporation) pos- sessing at least 80 percent of the total com- bined voting power of all classes of stock enti- tled to vote and the owner of at least 80 per- cent of the total number of shares of all other classes of stock (except nonvoting stock which is limited and preferred as to divi- dends); and either (2) the distribution is by such other corpo- ration in complete cancellation or redemption of all its stock, and the transfer of all the property occurs within the taxable year; in such case the adoption by the shareholders of the resolution under which is authorized the distribution of all the assets of such corpora- tion in complete cancellation or redemption of all its stock shall be considered an adoption of a plan of liquidation, even though no time for the completion of the transfer of the property is specified in such resolution; or (3) such distribution is one of a series of dis- tributions by such other corporation in com- plete cancellation or redemption of all its stock in accordance with a plan of liquidation under which the transfer of all the property under the liquidation is to be completed within 3 years from the close of the taxable year during which is made the first of the series of distributions under the plan, except that if such transfer is not completed within such period, or if the taxpayer does not con- tinue qualified under paragraph (1) until the completion of such transfer, no distribution under the plan shall be considered a distribu- tion in complete liquidation. If such transfer of all the property does not occur within the taxable year, the Secretary may require of the taxpayer such bond, or waiver of the statute of limitations on assess- ment and collection, or both, as he may deem necessarY to insure, if the transfer of the prop- erty is not completed within such 3-year period, or if the taxpayer does not continue qualified under paragraph (1) until the completion of such transfer, the assessment and collection of all income taxes then Imposed by law for such taxable year or subsequent taxable years, to the extent attributable to property so received. A distribution otherwise constituting a distribu- tion in complete liquidation within the meaning of this subsection shall not be considered as not constituting such a distribution merely because it does not constitute a distribution or liquida- tion within the meaning of the corporate law under which the distribution is made; and for purposes of this subsection a transfer of prop- erty of such other corporation to the taxpayer shall not be considered as not constituting a distribution (or one of a series of distributions) in complete cancellation or redemption of all the stock of such other corporation, merely be- cause the carrying out of the plan involves (A) the transfer under the plan to the taxpayer by such other corporation of property, not attrib- utable to shares owned by the taxpayer, on an exchange described in section 361, and (B) the complete cancellation or redemption under the plan, as a result of exchanges described in sec- tion 354, of the shares not owned by the tax- payer, (c) Special rule for indebtedness of subsidiary to parent If- (1) a corporation is liquidated and subsec- tion (a) applies to such liquidation, and (2) on the date of the adoption of the plan of liquidation, such corporation was indebted to the corporation which meets the 80 per- cent stock ownership requirements specified in subsection (b), then no gain or loss shall be recognized to the corporation so indebted because of the transfer of property in satisfaction of such indebted- ness. (Aug. 16, 1954, ch. 736, 68A Stat. 102; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Subsec. (b). Pub. L. 94-455 struck out "or his delegate" following "Secretary". CROSS REFERENCES Basis of property received in liquidations, see section 334 of this title. Carryovers in corporate acquisitions to which this section applies, see section 381 of this title. Foreign corporations, not considered as a corpora- tion in determining the extent to which gain shall be recognized in the case of exchanges described in this section, see section 367 of this title. Gain or loss on sales or exchanges in connection with certain liquidations, liquidations to which this section applies, see section 337 of this title. § 332 Page 248