[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.9100-20T]

[Page 744-745]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                              General Rules
 
Sec. 301.9100-20T  Election to treat certain distributions as made on 
the last day of the taxable year.

    (a) In general. Section 233(b) of the Revenue Act of 1964 (78 Stat. 
112) amends the Internal Revenue Code of 1954 by adding to section 1375 
a new subsection (e) (relating to certain distributions after close of 
taxable year). Section 1375(e) provides that a corporation, with the 
consent of its shareholders, may elect, for purposes of chapter 1 of the 
Code, to treat a distribution of money made after the close of the 
taxable year as made, and as received by its shareholders, on the last 
day of such taxable year if the following conditions are satisfied:
    (1) The corporation makes a distribution of money to its 
shareholders on or before the 15th day of the third month following the 
close of a taxable year with respect to which it was an electing small 
business corporation within the meaning of section 1371(b);
    (2) Such distribution is made pursuant to a resolution of the 
corporation's board of directors, adopted before the close of such 
taxable year, to distribute to its shareholders all or a part of the 
proceeds of one or more sales of capital assets, or of property 
described in section 1231(b), made during such taxable year; and
    (3) Each shareholder on the day such distribution is received--
    (i) Owns the same proportion of the stock of the corporation on such 
day as he owned on the last day of such taxable year, and
    (ii) Consents to such election. Section 1375(e) applies only with 
respect to taxable years of corporations beginning after December 31, 
1957.
    (b) Time and manner for making election--(1) Taxable years ending 
after February 26, 1964. For taxable years ending after February 26, 
1964, an election under section 1375(e) with respect to a taxable year 
shall be made by attaching to the corporation income tax return for such 
taxable year, filed not later than the time (including extensions 
thereof) prescribed by law, the following documents:
    (i) A statement that the corporation elects the application of 
section 1375(e) and the date and amount of each distribution to which 
the election applies;
    (ii) A copy of the resolution of the board of directors referred to 
in paragraph (a)(2) of this section; and
    (iii) A statement of the consent of each shareholder of the 
corporation containing the information required by, and filed in the 
manner provided in, paragraph (c) of this section.
    (2) Taxable years beginning after December 31, 1957, and ending on 
or before February 26, 1964. For taxable years beginning after December 
31, 1957, and ending on or before February 26, 1964, an election under 
section 1375(e) with respect to a taxable year shall be made on or 
before June 25, 1964, by either attaching the documents described in 
subparagraph (1) of this paragraph to its income tax return for such 
taxable year, or by filing such documents with the district director 
with whom the corporation has filed, or intends to file, its income tax 
return for such taxable year.
    (3) Election is binding. An election under subparagraph (1) or (2) 
of this paragraph is binding and may not be withdrawn.
    (c) Shareholders' consent. The consent of a shareholder to an 
election under section 1375(e) shall be in the form of a statement 
signed by the shareholder in which such shareholder consents to the 
election of the corporation. Such

[[Page 745]]

shareholder's consent is binding and may not be withdrawn after a valid 
election is made by the corporation. Each person who is a shareholder of 
the electing corporation must consent to the election; thus, where stock 
of the corporation is owned by a husband and wife as community property 
(or the income from which is community property), or is owned by tenants 
in common, joint tenants, or tenants by the entirety, each person having 
a community interest in such stock and each tenant in common, joint 
tenant, and tenant by the entirety must consent to the election. The 
consent of a minor shall be made by the minor or by his legal guardian, 
or his natural guardian if no legal guardian has been appointed. The 
consent of an estate shall be made by the executor or administrator 
thereof. The statement shall set forth the name, address, and account 
number of the corporation and of the shareholder, the date the 
distribution is received, the number and proportion of the shares of 
stock of the corporation owned by him on the date the distribution is 
received, and the number and proportion of such shares owned by him on 
the last day of the taxable year of the corporation with respect to 
which the election is made. The consents of all shareholders may be 
incorporated in one statement.

[T.D. 6719, 29 FR 4771, Apr. 3, 1964. Redesignated by T.D. 8435, 57 FR 
43896, Sept. 23, 1992]