§ 311 Taxability of corporation on distribution

OLRC 119-134 · eCFR 2026-10-19 · 9 amending Acts · cited by 4 sections

Enacted 1954 · Act Aug. 16, 1954, ch. 736 Amended · 9 Acts

195419691976197819801982198419861988(a) General rule(b) Distributions of appreciated property
Connections Cited by 4 · Cites 1
§ 311 Taxability of corporation on distribution
Amended 1969, 1976, 1978, 1982, 1984, 1986
  • 1986 Pub. L. 99-514 Pub. L. 99–514 amended section generally, substituting provisions relating to distributions of appreciated property for provisions relating to LIFO inventory, liability in excess of basis, and appreciated property used to redeem stock.
  • 1984 Pub. L. 98-369 Pub. L. 98–369, § 54(a)(3), substituted “Distributions of appreciated property” for “Appreciated property used to redeem stock” in heading.
  • 1984 Pub. L. 98-369 Pub. L. 98–369, § 54(a)(1), substituted “This subsection shall be applied after the applications of subsections (b) and (c)” for “Subsections (b) and (c) shall not apply to any distribution to which this subsection applies” in provisions following subpar. (B).
  • 1984 Pub. L. 98-369 Pub. L. 98–369, § 54(a)(1), struck out “of part or all of his stock in such corporation” before “and”.
  • 1984 Pub. L. 98-369 Pub. L. 98–369, § 54(a)(2)(A), substituted provisions relating to a distribution which is made with respect to qualified stock if section 302(b)(4) applies to such distribution or such distribution is a qualified distribution for provisions which had related to a distribution to a corporate shareholder if the basis of the property distributed was determined under section 301(d)(2).
  • 1984 Pub. L. 98-369 Pub. L. 98–369, § 54(a)(2)(A), (B), redesignated subpars. (C) to (F) as (B) to (E), respectively, and struck out former subpar. (B) which related to distributions to which section 302(b)(4) applied and which were made with respect to qualified stock.
  • 1984 Pub. L. 98-369 Pub. L. 98–369, § 712(j), added subpar. (C).
  • 1984 Pub. L. 98-369 Pub. L. 98–369, § 54(a)(2)(C), added par. (3).
  • 1982 Pub. L. 97-248 Pub. L. 97–248, § 223(a)(1), substituted reference to a distribution to a corporate shareholder if the basis of the property distributed is determined under section 301(d)(2) for reference to a distribution in complete redemption of all of the stock of a shareholder who, at all times within the 12-month period ending on the date of such distribution owned at least 10 percent in value of the outstanding stock of the distributing corporation, but only if the redemption qualified under section 302(b)(3) (determined without the application of section 302(c)(2)(A)(ii)).
  • 1982 Pub. L. 97-248 Pub. L. 97–248, § 223(a)(1), substituted reference to a distribution to which section 302(b)(4) applies and which is made with respect to qualified stock for reference to a distribution of stock or an obligation of a corporation, which was engaged in at least one trade or business, which had not received property constituting a substantial part of its assets from the distributing corporation, in a transaction to which section 351 applied or as a contribution to capital, within the 5-year period ending on the date of the distribution, and at least 50 percent in value of the outstanding stock of which was owned by the distributing corporation at any time within the 9-year period ending one year before the date of the distribution.
  • 1982 Pub. L. 97-248 Pub. L. 97–248, § 223(a)(1), substituted reference to a distribution of stock or an obligation of a corporation if the requirements of subsec. (e)(2) of this section are met with respect to the distribution for reference to a distribution of stock or securities pursuant to the terms of a final judgment rendered by a court with respect to the distributing corporation in a court proceeding under the Sherman Act (15 U.S.C. 1–7) or the Clayton Act (15 U.S.C. 12–27), or both, to which the United States was a party, but only if the distribution of such stock or securities in redemption of the distributing corporation’s stock was in furtherance of the purposes of the judgment.
  • 1982 Pub. L. 97-248 Pub. L. 97–248, § 223(a)(3), struck out subpar. (G) which provided that a distribution of stock to a distributee which is not an organization exempt from tax under section 501(a) of this title, if with respect to such distributee, subsec. (a)(1) or (b)(1) of section 1101 of this title applied to such distribution.
  • 1982 Pub. L. 97-248 Pub. L. 97–248, § 223(a)(2), added subsec. (e).
  • 1978 Pub. L. 95-600 Pub. L. 95–600 redesignated subpar. (H) as (G).
  • 1976 Pub. L. 94-455 Pub. L. 94–455, § 1901(a) (42)(A), substituted “then a gain shall be recognized” for “then again shall be recognized”.
  • 1976 Pub. L. 94-452 Pub. L. 94–452 and Pub. L. 94–455 § 1901(a)(42)(B)(i), (C), struck out subpar. (C) relating to certain distributions before Dec. 1, 1974, struck out “26 Stat. 209;” before “15 U.S.C. 1–7)” and “38 Stat. 730;” before “15 U.S.C. 12–27)” in subpar. (D), added subpar. (H), and redesignated subpars. (D) to (G), as so amended, as subpars. (C) to (F), respectively.
  • 1969 Pub. L. 91-172 Pub. L. 91–172, § 905(a), added subsec. (d).

Cases: Pope & Talbot, Inc. v. Commissioner, 162 F.3d 1236 (9th Cir. 1999)

(a) General rule Except as provided in subsection (b), no gain or loss shall be recognized to a corporation on the distribution (not in complete liquidation) with respect to its stock of—

Amended 1969, 1980, 1988
  • 1988 Pub. L. 100-647 Pub. L. 100–647, § 1018(d)(5)(E), substituted “distribution (not in complete liquidation) with respect to its stock” for “distribution, with respect to its stock,”.
  • 1980 Pub. L. 96-471 Pub. L. 96–471 substituted “section 453B” for “Section 453(d)”.
  • 1969 Pub. L. 91-172 Pub. L. 91–172, § 905(b)(1), inserted reference to subsec. (d).
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    (1) its stock (or rights to acquire its stock), or

    (2) property.

    (b) Distributions of appreciated property

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      (1) In general If—

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        (A) a corporation distributes property (other than an obligation of such corporation) to a shareholder in a distribution to which subpart A applies, and

        (B) the fair market value of such property exceeds its adjusted basis (in the hands of the distributing corporation),

        then gain shall be recognized to the distributing corporation as if such property were sold to the distributee at its fair market value.

        (2) Treatment of liabilities Rules similar to the rules of section 336(b) shall apply for purposes of this subsection.

        Amended 1988
        • 1988 Pub. L. 100-647 Pub. L. 100–647, § 1006(e)(21)(B), substituted “liabilities” for “liabilities in excess of basis” in heading.
        Cited by 1

          (3) Special rule for certain distributions of partnership or trust interests If the property distributed consists of an interest in a partnership or trust, the Secretary may by regulations provide that the amount of the gain recognized under paragraph (1) shall be computed without regard to any loss attributable to property contributed to the partnership or trust for the principal purpose of recognizing such loss on the distribution.

          Amended 1988