Internal Revenue Code · 26 U.S.C.
§ 307. Basis of stock and stock rights acquired in distributions
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 307
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- October 4, 1976 by Pub. L. 94–455
- Length
- 3 subsections · 301 words · about 1 min to read
- Cross-references
- cites 2; cited by 2 Code sections and 5 other regulations
- Regulations
- 2 issued under this section
If a shareholder in a corporation receives its stock or rights to acquire its stock (referred to in this subsection as “new stock”) in a distribution to which section 305(a) applies, then the basis of such new stock and of the stock with respect to which it is distributed (referred to in this section as “old stock”), respectively, shall, in the shareholder’s hands, be determined by allocating between the old stock and the new stock the adjusted basis of the old stock. Such allocation shall be made under regulations prescribed by the Secretary.
The election referred to in paragraph (1) shall be made in the return filed within the time prescribed by law (including extensions thereof) for the taxable year in which such rights were received. Such election shall be made in such manner as the Secretary may by regulations prescribe, and shall be irrevocable when made.
For basis of stock and stock rights distributed before June 22, 1954, see section 1052.
(Aug. 16, 1954, ch. 736, 68A Stat. 93; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 307
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 2 other sections
- § 305(a) Distributions of stock and stock rights
- § 1052 Basis established by the Revenue Act of 1932 or 1934 or by the Internal Revenue Code of 1939
Cited by 2 Code sections
Cited in 5 regulations not issued under it
- § 1.305-1 Stock dividends.
- § 1.312-8 Effect on earnings and profits of receipt of tax-free distributions requiring adjustment or allocation of basis of stock.
- § 1.355-6 Recognition of gain on certain distributions of stock or securities in controlled corporation.
- § 1.1244(d)-3 Stock dividend, recapitalizations, changes in name, etc.
- § 301.9001 Statutory provisions; Outer Continental Shelf Lands Act Amendments of 1978.
Amendment history
From the source credit and the official notes, newest first.
- Enacted by Pub. L. 94–455Parts changed in 1976: (a)
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter C Corporate Distributions and Adjustments
- Part I DISTRIBUTIONS BY CORPORATIONS
- Subpart A Effects on Recipients
Nearby sections
- § 303 Distributions in redemption of stock to pay death taxes
- § 304 Redemption through use of related corporations
- § 305 Distributions of stock and stock rights
- § 306 Dispositions of certain stock
- § 307 Basis of stock and stock rights acquired in distributions
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
1976—Subsecs. (a), (b)(2). Pub. L. 94–455 struck out “or his delegate” after “Secretary”.