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Internal Revenue Code, § 331. Gain Or Loss To Shareholder In Corporate Liquidations

I.R.C. § 331(a) Distributions In Complete Liquidation Treated As Exchanges
Amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated as in full payment in exchange for the stock.
I.R.C. § 331(b) Nonapplication Of Section 301
Section 301 (relating to effects on shareholder of distributions of property) shall not apply to any distribution of property (other than a distribution referred to in paragraph (2)(B) of section 316(b)) in complete liquidation.
I.R.C. § 331(c) Cross Reference
For general rule for determination of the amount of gain or loss recognized, see section 1001.
(Aug. 16, 1954, ch. 736, 68A Stat. 101; Feb. 26, 1964, Pub. L. 88-272, title II, 225(f)(2), 78 Stat. 88; Oct. 4, 1976, Pub. L. 94-455, title XIX, 1901(b)(28)(A), 90 Stat. 1799; Sept. 3, 1982, Pub. L. 97-248, title II, 222(a), (e)(1)(B), 96 Stat. 478, 480; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(63), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
Amendments to Part
1982--Pub. L. 97-248, title II, 222(e)(8)(B), Sept. 3, 1982, 96 Stat. 481, inserted “and special rule” in item for subpart D.
1976--Pub. L. 94-455, title XIX, 1901(b)(12)(B), Oct. 4, 1976, 90 Stat. 1795, struck out in table of subparts for part II of subchapter C of chapter 1 in subpart (C) “;foreign personal holding companies” after “corporations”.
Amendments to Subpart
1986--Pub. L. 99-514, title VI, 631(e)(16), Oct. 22, 1986, 100 Stat. 2275, struck out item 333 “Election as to recognition of gain in certain liquidations”.
AMENDMENTS
2018--Sec. 331. Pub. L. 115-141, Div. U, Sec. 401(a)(63), amended Sec. 331 by substituting “SHAREHOLDER” for “SHAREHOLDERS” in the heading.
1982--Subsec. (a). Pub. L. 97-248, 222(a), substituted provisions that amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated as in full payment in exchange for the stock for provisions that, in complete liquidations, amounts distributed shall be treated as in full payment in exchange for the stock, while amounts distributed in partial liquidation shall be treated as in part or full payment in exchange for the stock.
Subsec. (b). Pub. L. 97-248, 222(e)(1)(B), struck out “partial or” before “complete liquidation”.
1976--Subsec. (c). Pub. L. 94-455 substituted “reference” for “references” in heading and struck out cross reference relating to general rule for determination of the amount of gain or loss to the distributee and substituted “section 1001” for “section 1002”.
1964--Subsec. (b). Pub. L. 88-272 inserted “(other than a distribution referred to in paragraph (2)(B) of section 316(b))”.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(63), effective March 23, 2018.
EFFECTIVE DATE OF 1982 AMENDMENTS
Amendment by Pub. L. 97-248 applicable to distributions after Aug. 31, 1982, with exceptions for certain partial liquidations, see section 222(f) of Pub. L. 97-248, set out as a note under section 302 of this title.
EFFECTIVE DATE OF 1976 AMENDMENTS
Amendment by Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title.
EFFECTIVE DATE OF 1964 AMENDMENTS
Amendment by Pub. L. 88-272 applicable to distribution made in any taxable year of the distributing corporation beginning after Dec. 31, 1963, see section 225(l) of Pub. L. 88-272, set out as a 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 complete liquidation of such corporation and if the distribution of all the property under such liquidation occurs before Jan. 1, 1966, except for certain liquidations to which section 332 of this title applies.