[Code of Federal Regulations]
[Title 26, Volume 4]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.332-1]

[Page 69]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.332-1  Distributions in liquidation of subsidiary corporation; 
general.

    Under the general rule prescribed by section 331 for the treatment 
of distributions in liquidation of a corporation, amounts received by 
one corporation in complete liquidation of another corporation are 
treated as in full payment in exchange for stock in such other 
corporation, and gain or loss from the receipt of such amounts is to be 
determined as provided in section 1001. Section 332 excepts from the 
general rule property received, under certain specifically described 
circumstances, by one corporation as a distribution in complete 
liquidation of the stock of another corporation and provides for the 
nonrecognition of gain or loss in those cases which meet the statutory 
requirements. Section 367 places a limitation on the application of 
section 332 in the case of foreign corporations. See section 334(b) for 
the basis for determining gain or loss from the subsequent sale of 
property received upon complete liquidations such as described in this 
section. See section 453(d)(4)(A) relative to distribution of 
installment obligations by subsidiary.