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Internal Revenue Code · 26 U.S.C.

§ 311. Taxability of corporation on distribution

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

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. § 311

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Enacted
December 30, 1969 by Pub. L. 91–172
Last amended
November 10, 1988 by Pub. L. 100–647
Amendments
8 dated changes in the source credit
Length
2 subsections · 337 words · about 1 min to read
(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—
(1) its stock (or rights to acquire its stock), or
(2) property.
(b) Distributions of appreciated property
(1) In general If—
(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.

(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.

(Aug. 16, 1954, ch. 736, 68A Stat. 94; Pub. L. 91–172, title IX, § 905(a), (b)(1), Dec. 30, 1969, 83 Stat. 713, 714; Pub. L. 94–452, § 2(b), Oct. 2, 1976, 90 Stat. 1511; Pub. L. 94–455, title XIX, § 1901(a)(42)(A), (B)(i), (C), Oct. 4, 1976, 90 Stat. 1771; Pub. L. 95–600, title VII, § 703(j)(2)(A), (B), Nov. 6, 1978, 92 Stat. 2941; Pub. L. 96–471, § 2(b)(1), Oct. 19, 1980, 94 Stat. 2253; Pub. L. 97–248, title II, § 223(a), Sept. 3, 1982, 96 Stat. 483; Pub. L. 98–369, div. A, title I, § 54(a), title VII, § 712(j), July 18, 1984, 98 Stat. 568, 948; Pub. L. 99–514, title VI, § 631(c), Oct. 22, 1986, 100 Stat. 2272; Pub. L. 100–647, title I, §§ 1006(e)(8)(B), (21)(B), 1018(d)(5)(E), Nov. 10, 1988, 102 Stat. 3401, 3403, 3580.)

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 1 other section

Cited by 7 Code sections

Cited in 27 regulations not issued under it

Show 3 more

Amendment history

From the source credit and the official notes, newest first.

  1. Amended by Pub. L. 100–647Parts changed in 1988: (a) (b)(2) (b)(3)
  2. Amended by Pub. L. 99–514
  3. Amended by Pub. L. 98–369Parts changed in 1984: (d) (d)(1) (d)(1)(A) (d)(2)(A) (d)(2)(B) (e)(1)(C) (e)(3)
  4. Amended by Pub. L. 97–248Parts changed in 1982: (d)(2)(A) (d)(2)(B) (d)(2)(C) (d)(2)(G) (e)
  5. Amended by Pub. L. 96–471Parts changed in 1980: (a)
  6. Amended by Pub. L. 95–600Parts changed in 1978: (d)(2)(G)
  7. Amended by Pub. L. 94–455Parts changed in 1976: (d)(1)(B) (d)(2)
  8. Amended by Pub. L. 94–452
  9. Enacted by Pub. L. 91–172Parts changed in 1969: (a) (d)

Where it sits in the Code

  1. Subtitle A Income Taxes
  2. Chapter 1 NORMAL TAXES AND SURTAXES
  3. Subchapter C Corporate Distributions and Adjustments
  4. Part I DISTRIBUTIONS BY CORPORATIONS
  5. Subpart B Effects on Corporation

Nearby sections

Official notes

The Law Revision Counsel's notes for this section (amendments, effective dates and related laws) are long, so they have their own page.