Treasury Regulations · 26 CFR
§ 1.356-2. Receipt of additional consideration not in connection with an exchange.
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. § 356
Cite as 26 CFR § 1.356-2
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Source
- T.D. 6500, 25 FR 11402, Nov. 26, 1960; 25 FR 14021, Dec. 21, 1960; T.D. 9989, 89 FR 17606, Mar. 11, 2024, unless otherwise noted.
- Issued under
- 26 U.S.C. § 356
- Length
- 255 words · about 1 min to read
- Cross-references
- cites 3 Code sections and 0 regulations; cited by 0
Individuals A and B each own 50 of the 100 outstanding shares of common stock of Corporation X. Corporation X owns all of the stock of Corporation Y, 100 shares. Corporation X distributes to each shareholder 50 shares of the stock of Corporation Y plus $100 cash without requiring the surrender of any shares of its own stock. The $100 cash received by each is treated as a distribution of property to which the rules of section 301 apply.
If, in the above example, Corporation X distributes 50 shares of stock of Corporation Y to A and 30 shares of such stock plus $100 cash to B without requiring the surrender of any of its own stock, the amount of cash received by B is treated as a distribution of property to which the rules of section 301 apply.
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Effects on shareholders and security holders
Nearby sections
- § 1.355-6 Recognition of gain on certain distributions of stock or securities in controlled corporation.
- § 1.355-7 Recognition of gain on certain distributions of stock or securities in connection with an acquisition.
- § 1.355-8 Definition of predecessor and successor and limitations on gain recognition under section 355(e) and section 355(f).
- § 1.356-1 Receipt of additional consideration in connection with an exchange.
- § 1.356-2 Receipt of additional consideration not in connection with an exchange.
- § 1.356-3 Rules for treatment of securities as “other property”.
- § 1.356-4 Exchanges for section 306 stock.
- § 1.356-5 Transactions involving gift or compensation.
- § 1.356-6 Rules for treatment of nonqualified preferred stock as other property.