[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: 26CFR1.374-2]

[Page 358]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.374-2  Basis of property acquired after December 31, 1938, by 

railroad corporation in a receivership or railroad reorganization 
proceeding.

    Section 374(b)(1) provides that if property of a railroad 
corporation, as defined in section 77(m) of the Bankruptcy Act (11 
U.S.C. 205(m)), was acquired after July 31, 1955, in pursuance of an 
order of the court having jurisdiction of such corporation in either a 
receivership proceeding or a proceeding under section 77 of the 
Bankruptcy Act, and the acquiring corporation is also a railroad 
corporation as defined in section 77(m) of such Act, organized or 
availed of to effectuate a plan of reorganization approved by the court 
in such proceeding, the basis shall be the same as it would be in the 
hands of the transferor railroad corporation, increased in the amount of 
gain recognized to the transferor under section 374(a)(2) and paragraph 
(b) of Sec. 1.374-1. For purposes of section 374(b)(1), it is 
unnecessary that the acquisition in question be a direct transfer from 
the corporation undergoing reorganization or that such reorganization 
constitute a reorganization within the meaning of section 368(a) since 
that section does not apply to part IV, subchapter C, chapter 1 of the 
Code. It is sufficient if the acquisition is in pursuance of an order of 
the court and is an integral step in the consummation of a 
reorganization plan approved by the court having jurisdiction of the 
proceeding. If the transaction falls within the provisions of section 
374(b)(1), the basis of the property involved shall be determined 
pursuant to such provisions, notwithstanding that the transaction might 
also fall within another basis provision.

[T.D. 6528, 26 FR 401, Jan. 19, 1961, as amended by T.D. 7616, 44 FR 
26870, May 8, 1979]