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TITLE 26-INTERNAL REVENUE CODE § 1103. Definitions (a) Bank holding company For purposes of this part, the term "bank holding company" has the meaning assigned to such term by section 2 of the Bank Holding Company Act of 1956. (b) Qualified bank holding corporation (1) In general Except as provided in paragraph (2), for purposes of this part the term "qualified bank holding corporation" means any corpo- ration (as defined in section 7701(a)(3)) which is a bank holding company and which holds prohibited property acquired by It- (A) on or before May 15, 1955, (B) in a distribution in which gain to such corporation with respect to the receipt of such property was not recognized by reason of subsection (a) or (b) of section 1101, or (C) in exchange for all of Its stock in an exchange described in section 1101(c)(2) or (c)(3). (2) Limitations (A) A bank holding company shall not be a qualified bank holding corporation, unless it would have been a bank holding company on May 15, 1955, if the Bank Holding Com- pany Act of 1956 had been in effect on such date, or unless it is a bank holding rompany determined solely by reference to- (J) property acquired by it on or before May 15, 1955, (ii) property acquired by it in a distribu- tion in which gain to such corporation with respect to the receipt of such proper- ty was not recognized by reason of subsec- tion (a) or (b) of section 1101, and (iii) property acquired by it in exchange for all of its stock in an exchange de- scribed in section 1101(c)(2) or (3). (B) A bank holding company shall not be a qualified bank holding corporation by reason of property described in subpara- graph (B) of paragraph (1) or clause (ii) of subparagraph (A) of this paragraph, unless such property was acquired in a distribution with respect to stock, which stock was ac- quired by such bank holding company- (i) on or before May 15, 1955, (ii) in a distribution (with respect to stock held by it on May 15, 1955, or with respect to stock in respect of which all previous applications of this clause are satisfied) with respect to which gain to it was not recognized by reason of subsec- tion (a) or (b) of section 1101, or (iii) in exchange for all of its stock in an exchange described in section 1101(c)(2) or (3). (C) A corporation shall be treated as a qualified bank holding corporation only if the Board certifies that it satisfies the fore- going requirements of this subsection. (c) Prohibited property For the purposes of this part, the term "pro- hibited property" means, in the case of any bank holding company, property (other than nonexempt property) the disposition of which would be necessary or appropriate to effectuate section 4 of the Bank Holding Company Act of 1956 if such company continued to be a bank holding company beyond the period (including any extensions thereof) specified in subsection (a) of such section or in section 1101(e)(2)(B) of this part, as the case may be. The term "pro- hibited property" does not Include shares of any company held by a bank holding company to the extent that the prohibitions of section 4 of the Bank Holding Company Act of 1956 do not apply to the ownership by such bank hold- ing company of such property by reason of sub- section (c)(5) of such section. (d) Nonexempt property For purposes of this part, the term "nonex- empt property" means- (1) obligations (including notes, drafts, bills of exchange, and bankers' acceptances) having a maturity at the time of Issuance of not exceeding 24 months, exclusive of days of grace; (2) securities issued by or guaranteed as to principal or interest by a government or sub- division thereof or by any Instrumentality of a government or subdivision; or (3) money, and the right to receive money not evidenced by a security or obligation (other than a security or obligation described in paragraph (1) or (2)). (e) Board For purposes of this part, the term "Board" means the Board of Governors of the Federal Reserve System. (Added May 9, 1956, ch. 240, § 10(a), 70 Stat. 144.) SECTION EFFECTIVE OCTOBER 1, 1977 Pub. L. 94-452, § 2(a), (d)(1), Oct 2, 1976, 90 Stat. 1503, 1512, provided that, effective on Oct 1, 1977, with respect to distributions after July 7, 1970, in taxable years ending after July 7, 1970, section 1103 will read as follows: § 1103. Definitions (a) Bank holding company; Bank Holding Company Act For purposes of this part- (1) Bank holding company The term "bank holding company" means- (A) a bank holding company within the meaning of section 2(a) of the Bank Hold- ing Company Act, or (B) a bank holding company subsidiary within the meaning of section 2(d) of such Act. (2) Bank Holding Company Act The term "Bank Holding Company Act" means the Bank Holding Company Act of 1956, as amended through December 31, 1970 (12 U.S.C. 1841 et seq.). (b) Qualified bank holding corporation (1) In general Except as provided in paragraph (2), for purposes of this part the term "qualified bank holding corporation" means any corporation (as defined in section 7701(a)(3)) which is a bank holding company and which holds pro- hibited property acquired by it- § 1103 Page 672