[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: 26CFR1.368-3]

[Page 351-352]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.368-3  Records to be kept and information to be filed with returns.

    (a) The plan of reorganization must be adopted by each of the 
corporations parties thereto; and the adoption must be shown by the acts 
of its duly constituted responsible officers, and appear upon the 
official records of the corporation. Each corporation, a party to a 
reorganization, shall file as a part of its return for its taxable year 
within which the reorganization occurred a complete statement of all 
facts pertinent to the nonrecognition of gain or loss in connection with 
the reorganization, including:
    (1) A copy of the plan of reorganization, together with a statement, 
executed under the penalties of perjury, showing in full the purposes 
thereof and in detail all transactions incident to, or pursuant to, the 
plan.
    (2) A complete statement of the cost or other basis of all property, 
including all stock or securities, transferred incident to the plan.
    (3) A statement of the amount of stock or securities and other 
property or money received from the exchange, including a statement of 
all distributions or other disposition made thereof. The amount of each 
kind of stock or securities and other property received shall be stated 
on the basis of the fair market value thereof at the date of the 
exchange.
    (4) A statement of the amount and nature of any liabilities assumed 
upon the exchange, and the amount and nature of any liabilities to which 
any of the property acquired in the exchange is subject.
    (b) Every taxpayer, other than a corporation a party to the 
reorganization, who receives stock or securities and other property or 
money upon a tax-free exchange in connection with a corporate 
reorganization shall incorporate

[[Page 352]]

in his income tax return for the taxable year in which the exchange 
takes place a complete statement of all facts pertinent to the 
nonrecognition of gain or loss upon such exchange including:
    (1) A statement of the cost or other basis of the stock or 
securities transferred in the exchange, and
    (2) A statement in full of the amount of stock or securities and 
other property or money received from the exchange, including any 
liabilities assumed upon the exchange, and any liabilities to which 
property received is subject. The amount of each kind of stock or 
securities and other property (other than liabilities assumed upon the 
exchange) received shall be set forth upon the basis of the fair market 
value thereof at the date of the exchange.
    (c) Permanent records in substantial form shall be kept by every 
taxpayer who participates in a tax-free exchange in connection with a 
corporate reorganization showing the cost or other basis of the 
transferred property and the amount of stock or securities and other 
property or money received (including any liabilities assumed on the 
exchange, or any liabilities to which any of the properties received 
were subject), in order to facilitate the determination of gain or loss 
from a subsequent disposition of such stock or securities and other 
property received from the exchange.

[T.D. 6500, 25 FR 11607, Nov. 26, 1960, as amended by T.D. 6622, 27 FR 
11918, Dec. 4, 1962]

                       Insolvency Reorganizations