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TITLE 26-INTERNAL REVENUE CODE or securities permitted by subsection (a) to be received without the recognition of gain, but also of other property or money, then- (A) if the corporation receiving such other property or money distributes it in pursuance of the plan of reorganization, no gain to the corporation shall be recognized from the exchange, but (B) if the corporation receiving such other property or money does riot distribute it in pursuance of the plan of reorganiza- tion, the gain, if any, to the corporation shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property so received, which is not so distributed. (2) Loss If subsection (a) would apply to an ex- change but for the fact that the property re- ceived in exchange consists not only of prop- erty permitted by subsection (a) to be re- ceived without the recognition of gain or loss, but also of other property or money, then no loss from the exchange shall be recognized. (Aug. 16, 1954, ch. 736, 68A Stat. 118.) CROSS REFERENCES Assumption of liability, see section 357 of this title. Basis to distributees, see section 358 of this title. Carryovers In corporate acquisitions, see section 381 of this title. Complete liquidations of subsidiaries, exchange de- scribed in this section, see section 332 of this title. Foreign corporations, see section 367 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 48, 49, 332, 341, 357, 358, 367, 381, 1245, 1250, 1251 of this title. § 362. Basis to corporations (a) Property acquired by issuance of stock or as paid- in surplus If property was acquired on or after June 22, 1954, by a corporation- (1) in connection with a transaction to which section 351 (relating to transfer of property to corporation controlled by trans- feror) applies, or (2) as paid-in surplus or as a contribution to capital, then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain recognized to the transferor on such transfer. (b) Transfers to corporations If property was acquired by a corporation in connection with a reorganization to which this part applies, then the basis shall be the same as it would be in the hands of the transferor, in- creased in the amount of gain recognized to the transferor on such transfer. This subsection shall not apply if the property acquired consists of stock or securities in a corporation a party to the eorganization, unless acquired by the ex- cha, ,e of stock or securities of the transferee (or ol a corporation which is in control of the transferee) as the consideration in whole or in part for the transfer. (c) Special rule for certain contributions to capital (1) Property other than money Notwithstanding subsection (a)(2), if prop- erty other than money- (A) is acquired by a corporation, on or after June 22, 1954, as a contribution to cap- ital, and (B) is not contributed by a shareholder as such, then the basis of such property shall be zero. (2) Money Notwithstanding subsection (a)(2), if money- (A) is received by a corporation, on or after June 22, 1954, as a contribution to cap- ital, and (B) is not contributed by a shareholder as such, then the basis of any property acquired with such money during the 12-month period be- ginning on the day the contribution is re- ceived shall be reduced by the amount of such contribution. The excess (if any) of the amount of such contribution over the amount of the reduction under the preceding sen- tence shall be applied to the reduction (as of the last day of the period specified in the pre- ceding sentence) of the basis of any other property held by the taxpayer. The particular properties to which the reductions required by this paragraph shall be allocated shall be determined under regulations prescribed by the Secretary. (3) Exception for contributions in aid of construc- tion The provisions of this subsection shall not apply to contributions in aid of construction to which section 118(b) applies. (Aug. 16, 1954, ch. 736, 68A Stat. 118; Oct. 22, 1968, Pub. L. 90-621, § 2(b), 82 Stat. 1311; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), title XXI, § 2120(b), 90 Stat. 1834, 1913.) AMENDMENTS 1976-Subsec. (c)(2)(B). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (c)(3). Pub. L. 94-455, § 2120(b), added subsec. (c)(3). 1968-Subsec. (b). Pub. L. 90-621 substituted the ex- change of stock or securities of the transferee (or of a corporation which is in control of the transferee) for the issuance of stock or securities of the transferee as the transaction rendering the subsection applicabie. EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsec. (c)(3) by section 2120(b) of Pub. L. 94-455 applicable to contributions made after Jan. 31, 1976, see section 2120(c) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 118 of this title. EFFECTIVE DATE OF 1968 AMENDMENT Amendment by Pub. L. 90-621 applicable only in re- spect of plans of reorganization adopted after Oct. 22, 1968, see section 2(c) of Pub. L. 90-621, set out as an Effective Date of 1968 Amendment note under section 358 of this title. CROSS REFERENCES Basis to distributees, see section 358 of this title. Page 265 § 362