[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: 26CFR1.374-4]

[Page 358-359]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.374-4  Property acquired by electric railway corporation in 
corporate reorganizing proceeding.

    Subject to the limitations and conditions set forth in section 
374(b)(2), if

[[Page 359]]

the reorganization under section 77 of the Bankruptcy Act (11 U.S.C. 501 
and following) of an electric railway corporation results in the 
acquisition of the property of such corporation by another corporation, 
the basis of such property in the hands of the acquiring corporation is 
the same as it would be in the hands of the old corporation. It is 
requisite to the application of the section that both corporations be 
street, suburban, or interurban electric railway corporations engaged in 
the transportation of persons or property in interstate commerce, and 
that the acquisition is in pursuance of an order of the court and is an 
integral step in the consummation of a reorgnizing plan approved by the 
court having jurisidiction of the proceeding. If section 374(b)(2) 
applies, section 270 of the Bankruptcy Act (11 U.S.C. 670), relating to 
the adjustment of basis by reason of the cancellation or reduction of 
indebtedness in a corporate reorganization proceeding, is inapplicable. 
Moreover, if the transaction is within the provisons of section 
374(b)(2) and may also be considered to be within any other basis 
provision, then the provisions of section 374(b)(2) only shall apply.

[T.D. 7616, 44 FR 26870, May 8, 1979]

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