I.R.C. § 269(a) In General —
If—
I.R.C. § 269(a)(1) —
any person or persons acquire, directly or indirectly, control of a corporation,
or
I.R.C. § 269(a)(2) —
any corporation acquires, directly or indirectly, property of another corporation,
not controlled, directly or indirectly, immediately before such acquisition, by such
acquiring
corporation or its stockholders, the basis of which property, in the hands of the
acquiring corporation, is determined by reference to the basis in the hands of the
transferor corporation,
and the principal purpose for which such acquisition was made is evasion or avoidance
of Federal income
tax by securing the benefit of a deduction, credit, or other allowance
which such person or corporation would not otherwise enjoy, then the Secretary may
disallow such deduction, credit, or other allowance. For purposes of paragraphs (1)
and (2), control means the ownership of stock possessing at least 50 percent of the
total combined voting power of all classes of stock entitled to vote or at least
50 percent of the total value of shares of all classes of stock of the corporation.
I.R.C. § 269(b) Certain Liquidations After Qualified Stock Purchases
I.R.C. § 269(b)(1) In General —
If—
I.R.C. § 269(b)(1)(A) —
there is a qualified stock purchase by a corporation of another corporation,
I.R.C. § 269(b)(1)(B) —
an election is not made under section 338 with respect to such purchase,
I.R.C. § 269(b)(1)(C) —
the acquired corporation is liquidated pursuant to a plan of liquidation adopted
not more than 2 years after the acquisition date, and
I.R.C. § 269(b)(1)(D) —
the principal purpose for such liquidation is the evasion or avoidance of Federal
income tax by securing the benefit of a deduction, credit, or other allowance which
the acquiring corporation would not otherwise enjoy,
then the Secretary may disallow such deduction, credit, or other allowance.
I.R.C. § 269(b)(2) Meaning Of Terms —
For purposes of paragraph (1), the terms “qualified stock purchase” and “acquisition
date” have the same respective meanings as when used in section 338.
I.R.C. § 269(c) Power Of Secretary To Allow Deduction, Etc., In Part —
In any case to which subsection (a) or (b) applies the Secretary is authorized—
I.R.C. § 269(c)(1) —
to allow as a deduction, credit, or allowance any part of any amount disallowed
by such subsection, if he determines that such allowance will not result in the evasion
or avoidance of Federal income tax for which the acquisition was made; or
I.R.C. § 269(c)(2) —
to distribute, apportion, or allocate gross income, and distribute, apportion, or
allocate the deductions, credits, or allowances the benefit of which was sought to
be secured, between or among the corporations, or properties, or parts thereof, involved,
and to allow such deductions, credits, or allowances so distributed, apportioned,
or allocated, but to give effect to such allowance only to such extent as he determines
will not result in the evasion or avoidance of Federal income tax for which the
acquisition was made; or
I.R.C. § 269(c)(3) —
to exercise his powers in part under paragraph (1) and in part under paragraph (2).
(Aug. 16, 1954, ch. 736, 68A Stat. 80; Feb. 26, 1964,
Pub. L. 88-272, title II, 235(c)(2), 78 Stat. 126; Oct. 4, 1976, Pub. L. 94-455, title XIX, 1901(a)(38), 1906(b)(13)(A), 90 Stat. 1771, 1834; July
18, 1984, Pub. L. 98-369, div. A, title VII, 712(k)(8)(A), (B), 98 Stat. 952; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(45), Dec. 19, 2014, 128 Stat. 4010.)
BACKGROUND NOTES
AMENDMENTS
2014—Subsec. (a). Pub. L. 113-295, Div. A, Sec. 221(a)(45), amended par. (1) and
(2) by striking “or acquired on or after October 8, 1940,”.
1984--Subsecs. (b), (c). Pub. L. 98-369 added subsec. (b), redesignated former subsec.
(b) as (c) and inserted reference to subsec. (b).
1976--Subsecs. (a), (b). Pub. L. 94-455, 1906(b)(13)(A), struck out “or his delegate"
after “Secretary” wherever appearing.
Subsec. (c). Pub. L. 94-455, 1901(a)(38), struck out subsec. (c) relating to presumptions in the case of disproportionate
purchase price.
1964--Subsec. (a). Pub. L. 88-272 substituted “the Secretary or his delegate may disallow such deduction, credit, or
other allowance” for “such deduction, credit or other allowance shall not be allowed”.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 221(a)(45), effective on the date of the enactment of this Act [Enacted:
Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2)
SAVINGS PROVISION.—If—
“(A)
any provision amended or repealed by the amendments made by this section applied to—
“(i)
any transaction occurring before the date of the enactment of this Act [Enacted: Dec.
19, 2014],
“(ii)
any property acquired before such date of enactment, or
“(iii)
any item of income, loss, deduction, or credit taken into account before such date
of enactment, and
“(B)
the treatment of such transaction, property, or item under such provision would (without
regard to the amendments or repeals made by this section)
affect the liability for tax for periods ending after date of enactment, nothing in
the amendments or repeals made by this section shall be construed to affect the treatment
of such transaction, property, or item for purposes of determining liability for tax
for periods ending after such date of enactment.”
EFFECTIVE DATE OF 1984 AMENDMENT
Section 712(k)(8)(C) of Pub. L. 98-369 provided that: “The amendments made by this paragraph [amending this section]
shall apply to liquidations after October 20, 1983, in taxable years ending after
such date.”
EFFECTIVE DATE OF 1964 AMENDMENT
Amendment by Pub. L. 88-272 applicable to taxable years ending after Dec. 31, 1963, see section 235(d) of Pub. L. 88-272, set out as a note under section 1551 of this title.
