Treasury Regulations · 26 CFR
§ 1.332-7. Indebtedness of subsidiary to parent.
Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).
Regulation under 26 U.S.C. § 332
Cite as 26 CFR § 1.332-7
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- November 26, 1960 by T.D. 6500
- Last amended
- March 28, 2016 by T.D. 9759
- Issued under
- 26 U.S.C. § 332
- Length
- 177 words · about 1 min to read
- Cross-references
- cites 2 Code sections and 0 regulations; cited by 1
If section 332(a) is applicable to the receipt of the subsidiary's property in complete liquidation, then no gain or loss shall be recognized to the subsidiary upon the transfer of such properties even though some of the properties are transferred in satisfaction of the subsidiary's indebtedness to its parent. See section 337(b)(1). However, any gain or loss realized by the parent corporation on such satisfaction of indebtedness, shall be recognized to the parent corporation at the time of the liquidation. For example, if the parent corporation purchased its subsidiary's bonds at a discount and upon liquidation of the subsidiary the parent corporation receives payment for the face amount of such bonds, gain shall be recognized to the parent corporation. Such gain shall be measured by the difference between the cost or other basis of the bonds to the parent and the amount received in payment of the bonds.
[T.D. 6500, 25 FR 11607, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 9759, 81 FR 17071, Mar. 28, 2016]
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
- § 332 Complete liquidations of subsidiaries
- § 337 Nonrecognition for property distributed to parent in complete liquidation of subsidiary
Cited by 1 other regulation
Amendment history
From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.
- Amended by T.D. 9759 (81 FR 17071)
- Amended (25 FR 14021)
- Issued by T.D. 6500 (25 FR 11607)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Effects on recipients
Nearby sections
- § 1.332-3 Liquidations completed within one taxable year.
- § 1.332-4 Liquidations covering more than one taxable year.
- § 1.332-5 Distributions in liquidation as affecting minority interests.
- § 1.332-6 Records to be kept and information to be filed with return.
- § 1.332-7 Indebtedness of subsidiary to parent.
- § 1.332-8 Recognition of gain on liquidation of certain holding companies.
- § 1.334-1 Basis of property received in liquidations.
- § 1.336-0 Table of contents.
- § 1.336-1 General principles, nomenclature, and definitions for a section 336(e) election.