Internal Revenue Code · 26 U.S.C.
§ 331. Gain or loss to shareholder in corporate liquidations
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. § 331
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- February 26, 1964 by Pub. L. 88–272
- Last amended
- March 23, 2018 by Pub. L. 115–141
- Amendments
- 3 dated changes in the source credit
- Length
- 3 subsections · 156 words · about 1 min to read
- Cross-references
- cites 3; cited by 5 Code sections and 33 other regulations
- Regulations
- 1 issued under this section
Amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated as in full payment in exchange for the stock.
Section 301 (relating to effects on shareholder of distributions of property) shall not apply to any distribution of property (other than a distribution referred to in paragraph (2)(B) of section 316(b)) in complete liquidation.
For general rule for determination of the amount of gain or loss recognized, see section 1001.
(Aug. 16, 1954, ch. 736, 68A Stat. 101; Pub. L. 88–272, title II, § 225(f)(2), Feb. 26, 1964, 78 Stat. 88; Pub. L. 94–455, title XIX, § 1901(b)(28)(A), Oct. 4, 1976, 90 Stat. 1799; Pub. L. 97–248, title II, § 222(a), (e)(1)(B), Sept. 3, 1982, 96 Stat. 478, 480; Pub. L. 115–141, div. U, title IV, § 401(a)(63), Mar. 23, 2018, 132 Stat. 1187.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 331
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 3 other sections
- § 301 Distributions of property
- § 316(b) Dividend defined
- § 1001 Determination of amount of and recognition of gain or loss
Cited by 5 Code sections
- § 301(f)(2) Distributions of property
- § 302(f)(3) Distributions in redemption of stock
- § 306(b)(2) Dispositions of certain stock
- § 332(d)(1)(A) Complete liquidations of subsidiaries
- § 453(h)(1)(A) Installment method
Cited in 33 regulations not issued under it
- § 1.59A-3 Base erosion payments and base erosion tax benefits.
- § 1.61-6 Gains derived from dealings in property.
- § 1.168(k)-2 Additional first year depreciation deduction for property acquired and placed in service after September 27, 2017.
- § 1.197-2 Amortization of goodwill and certain other intangibles.
- § 1.302-1 General.
- § 1.306-2 Exception.
- § 1.316-1 Dividends.
- § 1.332-1 Distributions in liquidation of subsidiary corporation; general.
- § 1.336-2 Availability, mechanics, and consequences of section 336(e) election.
- § 1.338(h)(10)-1 Deemed asset sale and liquidation.
- § 1.346-1 Partial liquidation.
- § 1.367(b)-3 Repatriation of foreign corporate assets in certain nonrecognition transactions.
- § 1.368-2 Definition of terms.
- § 1.385-3 Certain distributions of debt instruments and similar transactions.
- § 1.409A-3 Permissible payments.
- § 1.453-11 Installment obligations received from a liquidating corporation.
- § 1.514(d)-1 Basis of debt-financed property acquired in corporate liquidation.
- § 1.562-1 Dividends for which the dividends paid deduction is allowable.
- § 1.897-5T Corporate distributions (temporary).
- § 1.962-3 Treatment of actual distributions.
- § 1.963-3 Distributions counting toward a minimum distribution.
- § 1.965-4 Disregard of certain transactions.
- § 1.987-13 Suspended section 987 loss upon terminations.
- § 1.1081-2 Purpose and scope of exception.
Show 9 more
- § 1.1248-1 Treatment of gain from certain sales or exchanges of stock in certain foreign corporations.
- § 1.1445-5 Special rules concerning distributions and other transactions by corporations, partnerships, trusts, and estates.
- § 1.1502-13 Intercompany transactions.
- § 1.6162-1 Extension of time for payment of tax on gain attributable to liquidation of personal holding companies.
- § 58.4501-0 Table of contents.
- § 58.4501-2 General rules regarding excise tax on stock repurchases.
- § 58.4501-5 Examples.
- § 58.4501-7 Special rules for acquisitions or repurchases of stock of certain foreign corporations.
- § 601.201 Rulings and determinations letters.
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter C Corporate Distributions and Adjustments
- Part II CORPORATE LIQUIDATIONS
- Subpart A Effects on Recipients
Nearby sections
- § 331 Gain or loss to shareholder in corporate liquidations
- § 332 Complete liquidations of subsidiaries
- § 333 Repealed
- § 334 Basis of property received in liquidations
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2018—Pub. L. 115–141 substituted “shareholder” for “shareholders” in section catchline.
1982—Subsec. (a). Pub. L. 97–248, § 222(a), substituted provisions that amounts received by a shareholder in a distribution in complete liquidation of a corporation shall be treated as in full payment in exchange for the stock for provisions that, in complete liquidations, amounts distributed shall be treated as in full payment in exchange for the stock, while amounts distributed in partial liquidation shall be treated as in part or full payment in exchange for the stock.
Subsec. (b). Pub. L. 97–248, § 222(e)(1)(B), struck out “partial or” before “complete liquidation”.
1976—Subsec. (c). Pub. L. 94–455 substituted “reference” for “references” in heading and struck out cross reference relating to general rule for determination of the amount of gain or loss to the distributee and substituted “section 1001” for “section 1002”.
1964—Subsec. (b). Pub. L. 88–272 inserted “(other than a distribution referred to in paragraph (2)(B) of section 316(b))”.
Statutory Notes and Related Subsidiaries
Effective Date of 1982 Amendment
Amendment by Pub. L. 97–248 applicable to distributions after Aug. 31, 1982, with exceptions for certain partial liquidations, see section 222(f) of Pub. L. 97–248, set out as a note under section 302 of this title.
Effective Date of 1976 Amendment
Amendment by Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Effective Date of 1964 Amendment
Amendment by Pub. L. 88–272 applicable to distribution made in any taxable year of the distributing corporation beginning after Dec. 31, 1963, see section 225(l) of Pub. L. 88–272, set out as a note under section 316 of this title.
Liquidations Before January 1, 1966
Pub. L. 88–272, title II, § 225(h), Feb. 26, 1964, 78 Stat. 90, provided that in the case of corporations referred to in former subsec. (g)(3) of this section the amendments made by section 225 of Pub. L. 88–272 do not apply if there is a complete liquidation of such corporation and if the distribution of all the property under such liquidation occurs before Jan. 1, 1966, except for certain liquidations to which section 332 of this title applies.