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TITLE 26-INTERNAL REVENUE CODE (it) the amount of any money received by the taxpayer, and (iii) the amount of loss to the taxpayer which was recognized on such exchange, and (B) increased by- (I) the amount which was treated as a dividend, and (ii) the amount of gain to the taxpayer which was recognized on such exchange (not including any portion of such gain which was treated as a dividend). (2) Other property The basis of any other property (except money) received by the taxpayer shall be its fair market value. (b) Allocation -of basis (1) In general Under regulations prescribed by the Secre- tary, the basis determined under subsection (a)(1) shall be allocated among the properties permitted to be received without the recogni- tion of gain or loss. (2) Special rule for section 355 In the case of an exchange to which section 355 (or so much of section 356 as relates to section 355) applies, then in making the allo- cation under paragraph (1) of this subsection, there shall be taken into account not only the property so permitted to be received without the recognition of gain or loss, but also the stock or secuirties (if any) of the distributing corporation which are retained, and the allo- cation of basis shall be made among all such properties. (3) Certain exchanges involving ConRail To the extent provided in regulations pre- scribed by the Secretary in the case of an ex- change to which section 354(d) (or so much of section 356 as relates to section 354(d)) or sec- tion 374(c) applies, for purposes of allocating basis under paragraph (1), stock of the Con- solidated Rail Corporation and the certificate of value of the United States Railway Associ- ation which relates to such stock shall, so long as they are held by the same person, be treated as one property. (c) Section 355 transactions which are not exchanges For purposes of this section, a distribution to which section 355 (or so much of section 356 as relates to section 355) applies shall be treated as an exchange, and for such purposes the stock and securities of the distributing corpora- tion which are retained shall be treated as sur- rendered, and received back, in the exchange. (d) Assumption of liability Where, as part of the consideration to the taxpayer, another party to the exchange as- sumed a liability of the taxpayer or acquired from the taxpayer property subject to a liabil- ity, such assumption or acquisition (in the amount of the liability) shall, for purposes of this section, be treated as money received by the taxpayer on the exchange. (e) Exception This section shall not apply to property ac- quired by a corporation by the exchange of its stock or securities (or the stock or securities of a corporation which is in control of the acquir- ing corporation) as consideration in whole or in part for the transfer of the property to it. (Aug. 16, 1954, ch. 736, 68A Stat. 117; Sept. 2, 1958, Pub. L. 85-866, title I, § 21(a), 72 Stat. 1620; Oct. 22, 1968, Pub. L. 90-621, § 2(a), 82 Stat. 1311; Mar. 31, 1976, Pub. L. 94-253, § 1(b), 90 Stat. 296; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMZNDMENTS 1976-Subsec. (a). Pub. L. 94-253, § l(b)(1), substitut- ed "371(b), or 374" for "or 371(b)". Subsecs. (b)(1), (3). Pub. L. 94-455 struck out "or his delegate" following "Secretary". Pub. L. 94-253, § l(b)(2), added subsec. (b)(3). 1968-Subsec. (e). Pub. L. 90-621 substituted ex- change of stock and securities for issuance of stock or securities as the transaction involved and added paren- thetical provisions making reference to stock or securi- ties of a corporation which is in control of the acquir- ing corporation. 1958-Subsec. (a)(1)(A)(iii). Pub. L. 85-866 added subsec. (a)(1)(A)(iii). EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94-253 applicable to taxable years ending after Mar, 31, 1976, see section 2 of Pub. L. 94-253, set out as an Effective Date of 1976 Amend- ment note under section 374 of this title. EFFECTIVE DATE OF 1968 AMENDMENI Section 2(c) of Pub. L. 90-621 provided that: "The amendments made by subsections (a) and (b) [amend- ing this section and section 362(b) of this title] shall apply only in respect of plans of reorganization adopt- ed after the date of the enactment of this Act [Oct 22, 1968]." EFFECTIVE DATE OF 1958 AMENDMENT Section 21(b) of Pub. L. 85-866 provided that: "The amendment made by subsection (a) [to subsec. (a)(1)(A) of this section] shall apply as provided in sec- tion 393 of the Internal Revenue Code of 1954 [section 393 of this title] as if the clause (iII) added by such amendment had been included in such Code at the time of its enactment [Aug. 16, 1954]." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 351, 372 of this title. SUBPART C-EFFECTS ON CORPORATION Sec. 361. Nonrecognition of gain or loss to corporations. 362. Basis to corporations. [363. Repealed.] AMENDMENTS 1976-Pub. L. 94-455, title XIX, § 1901(b)(13), Oct. 4, 1976, 90 Stat. 1795, struck out item 363 "Effect on earnings and profits". § 361. Nonrecognition of gain or loss to corporations (a) General rule No gain or loss shall be recognized if a corpo- ration a party to a reorganization exchanges property, in pursuance of the plan of reorgani- zation, solely for stock or securities in another corporation a party to the reorganization. (b) Exchanges not solely in kind (1) Gain If subsection (a) would apply to an ex- change but for the fact that the property re- ceived in exchange consists not only of stock Page 264