[Code of Federal Regulations]
[Title 26, Volume 11]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1081-9]

[Page 195]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1081-9  Requirements with respect to order of Securities and 
Exchange Commission.

    The term order of the Securities and Exchange Commission is defined 
in section 1083(a). In addition to the requirements specified in that 
definition, section 1081(f) provides that, except in the case of a 
distribution described in section 1081(c)(2), the provisions of section 
1081 shall not apply to an exchange, expenditure, investment, 
distribution, or sale unless each of the following requirements is met:
    (a) The order of the Securities and Exchange Commission must recite 
that the exchange, expenditure, investment, distribution, or sale is 
necessary or appropriate to effectuate the provisions of section 11(b) 
of the Public Utility Holding Company Act of 1935 (15 U. S. C. 79k (b)).
    (b) The order shall specify and itemize the stocks and securities 
and other property (including money) which are ordered to be acquired, 
transferred, received, or sold upon such exchange, acquisition, 
expenditure, distribution, or sale and, in the case of an investment, 
the investment to be made, so as clearly to identify such property.
    (c) The exchange, acquisition, expenditure, investment, 
distribution, or sale shall be made in obedience to such order and shall 
be completed within the time prescribed in such order.

These requirements were not designed merely to simplify the 
administration of the provisions of section 1081, and they are not to be 
considered as pertaining only to administrative matters. Each one of the 
three requirements is essential and must be met if gain or loss is not 
to be recognized upon the transaction.