Internal Revenue Code · 26 U.S.C.
§ 362. Basis to corporations
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. § 362
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- October 22, 1968 by Pub. L. 90–621
- Last amended
- March 23, 2018 by Pub. L. 115–141
- Amendments
- 7 dated changes in the source credit
- Length
- 5 subsections · 1,138 words · about 5 min to read
- Cross-references
- cites 2; cited by 5 Code sections and 60 other regulations
- Regulations
- 4 issued under this section
If property was acquired by a corporation in connection with a reorganization to which this part applies, then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain recognized to the transferor on such transfer. This subsection shall not apply if the property acquired consists of stock or securities in a corporation a party to the reorganization, unless acquired by the exchange of stock or securities of the transferee (or of a corporation which is in control of the transferee) as the consideration in whole or in part for the transfer.
In no event shall the basis of any property be increased under subsection (a) or (b) above the fair market value of such property (determined without regard to section 7701(g)) by reason of any gain recognized to the transferor as a result of the assumption of a liability.
If in any transaction described in subsection (a) or (b) there would (but for this subsection) be an importation of a net built-in loss, the basis of each property described in subparagraph (B) which is acquired in such transaction shall (notwithstanding subsections (a) and (b)) be its fair market value immediately after such transaction.
For purposes of subparagraph (A), there is an importation of a net built-in loss in a transaction if the transferee’s aggregate adjusted bases of property described in subparagraph (B) which is transferred in such transaction would (but for this paragraph) exceed the fair market value of such property immediately after such transaction.
The aggregate reduction in basis by reason of subparagraph (A) shall be allocated among the property so transferred in proportion to their respective built-in losses immediately before the transaction.
Any election under clause (i) shall be made at such time and in such form and manner as the Secretary may prescribe, and, once made, shall be irrevocable.
(Aug. 16, 1954, ch. 736, 68A Stat. 118; Pub. L. 90–621, § 2(b), Oct. 22, 1968, 82 Stat. 1311; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), title XXI, § 2120(b), Oct. 4, 1976, 90 Stat. 1834, 1913; Pub. L. 99–514, title VIII, § 824(b), Oct. 22, 1986, 100 Stat. 2374; Pub. L. 106–36, title III, § 3001(b)(2), June 25, 1999, 113 Stat. 182; Pub. L. 108–357, title VIII, § 836(a), Oct. 22, 2004, 118 Stat. 1594; Pub. L. 109–135, title IV, § 403(dd)(2), Dec. 21, 2005, 119 Stat. 2631; Pub. L. 113–295, div. A, title II, § 221(a)(51), Dec. 19, 2014, 128 Stat. 4045; Pub. L. 115–141, div. U, title IV, § 401(a)(67), Mar. 23, 2018, 132 Stat. 1187.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 362
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 2 other sections
Cited by 5 Code sections
- § 118(e)(1) Contributions to the capital of a corporation
- § 334(b)(1)(B) Basis of property received in liquidations
- § 351(h)(2) Transfer to corporation controlled by transferor
- § 357(d)(1) Assumption of liability
- § 1032(b) Exchange of stock for property
Cited in 60 regulations not issued under it
- § 1.108-7 Reduction of attributes.
- § 1.118-1 Contributions to the capital of a corporation.
- § 1.199A-2 Determination of W-2 wages and unadjusted basis immediately after acquisition of qualified property.
- § 1.263(e)-1 Expenditures in connection with certain railroad rolling stock.
- § 1.304-2 Acquisition by related corporation (other than subsidiary).
- § 1.332-6 Records to be kept and information to be filed with return.
- § 1.334-1 Basis of property received in liquidations.
- § 1.338-3 Qualification for the section 338 election.
- § 1.355-6 Recognition of gain on certain distributions of stock or securities in controlled corporation.
- § 1.355-8 Definition of predecessor and successor and limitations on gain recognition under section 355(e) and section 355(f).
- § 1.358-2 Allocation of basis among nonrecognition property.
- § 1.358-4 Exceptions.
- § 1.358-6 Stock basis in certain triangular reorganizations.
- § 1.367(a)-1 Transfers to foreign corporations subject to section 367(a): In general.
- § 1.367(a)-3 Treatment of transfers of stock or securities to foreign corporations.
- § 1.367(a)-7 Outbound transfers of property described in section 361(a) or (b).
- § 1.367(a)-8 Gain recognition agreement requirements.
- § 1.367(a)-9T Treatment of deemed section 351 exchanges pursuant to section 304(a)(1) (temporary).
- § 1.367(b)-2 Definitions and special rules.
- § 1.367(b)-3 Repatriation of foreign corporate assets in certain nonrecognition transactions.
- § 1.368-3 Records to be kept and information to be filed with returns.
- § 1.381(c)(6)-1 Depreciation method.
- § 1.381(c)(10)-1 Deferred exploration and development expenditures.
- § 1.460-4 Methods of accounting for long-term contracts.
Show 36 more
- § 1.467-7 Section 467 recapture and other rules relating to dispositions and modifications.
- § 1.615-4 Limitation of amount deductible.
- § 1.617-2 Limitation on amount deductible.
- § 1.755-1 Rules for allocation of basis.
- § 1.884-2T Special rules for termination or incorporation of a U.S. trade or business or liquidation or reorganization of a foreign corporation or its domestic subsidiary (temporary).
- § 1.897-5T Corporate distributions (temporary).
- § 1.897-6T Nonrecognition exchanges applicable to corporations, their shareholders, and other taxpayers, and certain transfers of property in corporate reorganizations (temporary).
- § 1.901(m)-2 Covered asset acquisitions and relevant foreign assets.
- § 1.921-1T Temporary regulations providing transition rules for DISCs and FSCs.
- § 1.951A-3 Qualified business asset investment.
- § 1.956-1 Shareholder's pro rata share of the average of the amounts of United States property held by a controlled foreign corporation.
- § 1.988-5 Section 988(d) hedging transactions.
- § 1.1001-1 Computation of gain or loss.
- § 1.1032-3 Disposition of stock or stock options in certain transactions not qualifying under any other nonrecognition provision.
- § 1.1244(c)-2 Small business corporation defined.
- § 1.1245-4 Exceptions and limitations.
- § 1.1248-8 Earnings and profits attributable to stock following certain non-recognition transactions.
- § 1.1248(f)-2 Exceptions for certain distributions and attribution rules.
- § 1.1251-4 Exceptions and limitations.
- § 1.1252-2 Special rules.
- § 1.1400Z2(a)-1 Deferring tax on capital gains by investing in opportunity zones.
- § 1.1502-13 Intercompany transactions.
- § 1.1502-19 Excess loss accounts.
- § 1.1502-30 Stock basis after certain triangular reorganizations.
- § 1.1502-31 Stock basis after a group structure change.
- § 1.1502-32 Investment adjustments.
- § 1.1502-35 Transfers of subsidiary stock and deconsolidations of subsidiaries.
- § 1.1502-36 Unified loss rule.
- § 1.1502-80 Applicability of other provisions of law.
- § 53.4940-1 Excise tax on net investment income.
- § 53.4942(a)-2 Computation of undistributed income.
- § 53.4968-2 Net investment income.
- § 301.7430-0 Table of contents.
- § 301.7430-1 Exhaustion of administrative remedies.
- § 301.7430-8 Administrative costs incurred in damage actions for violations of section 362 or 524 of the Bankruptcy Code.
- § 301.7433-2 Civil cause of action for violation of section 362 or 524 of the Bankruptcy Code.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 115–141Parts changed in 2018: (a)
- Amended by Pub. L. 113–295Parts changed in 2014: (a) (c)(1)(A)
- Amended by Pub. L. 109–135Parts changed in 2005: (e)(2)(C)(ii)
- Amended by Pub. L. 108–357Parts changed in 2004: (e)
- Amended by Pub. L. 106–36Parts changed in 1999: (d)
- Amended by Pub. L. 99–514Parts changed in 1986: (c)(3)
- Amended by Pub. L. 94–455Parts changed in 1976: (c)(2)(B) (c)(3)
- Enacted by Pub. L. 90–621Parts changed in 1968: (b)
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter C Corporate Distributions and Adjustments
- Part III CORPORATE ORGANIZATIONS AND REORGANIZATIONS
- Subpart C Effects on Corporations
Nearby sections
- § 361 Nonrecognition of gain or loss to corporations; treatment of distributions
- § 362 Basis to corporations
- § 363 Repealed
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2018—Subsec. (a). Pub. L. 115–141 struck out comma after “acquired” in introductory provisions.
2014—Subsec. (a). Pub. L. 113–295 struck out “on or after June 22, 1954” after “If property was acquired” in introductory provisions.
Subsec. (c)(1)(A), (2)(A). Pub. L. 113–295 struck out “, on or after June 22, 1954,” after “by a corporation”.
2005—Subsec. (e)(2)(C)(ii). Pub. L. 109–135 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “An election under clause (i) shall be included with the return of tax for the taxable year in which the transaction occurred, shall be in such form and manner as the Secretary may prescribe, and, once made, shall be irrevocable.”
2004—Subsec. (e). Pub. L. 108–357 added subsec. (e).
1999—Subsec. (d). Pub. L. 106–36 added subsec. (d).
1986—Subsec. (c)(3). Pub. L. 99–514 struck out par. (3) relating to exceptions for contributions in aid of construction.
1976—Subsec. (c)(2)(B). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (c)(3). Pub. L. 94–455, § 2120(b), added par. (3).
1968—Subsec. (b). Pub. L. 90–621 substituted the exchange of stock or securities of the transferee (or of a corporation which is in control of the transferee) for the issuance of stock or securities of the transferee as the transaction rendering the subsection applicable.
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.
Effective Date of 2005 Amendment
Amendment by Pub. L. 109–135 effective as if included in the provision of the American Jobs Creation Act of 2004, Pub. L. 108–357, to which such amendment relates, see section 403(nn) of Pub. L. 109–135, set out as a note under section 26 of this title.
Effective Date of 2004 Amendment
Pub. L. 108–357, title VIII, § 836(c)(1), Oct. 22, 2004, 118 Stat. 1596, provided that: “The amendment made by subsection (a) [amending this section] shall apply to transactions after the date of the enactment of this Act [Oct. 22, 2004].”
Effective Date of 1999 Amendment
Amendment by Pub. L. 106–36 applicable to transfers after Oct. 18, 1998, see section 3001(e) of Pub. L. 106–36, set out as a note under section 351 of this title.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514 applicable to amounts received after Dec. 31, 1986, in taxable years ending after such date, with certain exceptions and qualifications, see section 824(c) of Pub. L. 99–514, set out as a note under section 118 of this title.
Effective Date of 1976 Amendment
Amendment by section 2120(b) of Pub. L. 94–455 applicable to contributions made after Jan. 31, 1976, see section 2120(c) of Pub. L. 94–455, set out as a note under section 118 of this title.
Effective Date of 1968 Amendment
Amendment by Pub. L. 90–621 applicable only in respect of plans of reorganization adopted after Oct. 22, 1968, see section 2(c) of Pub. L. 90–621, set out as a note under section 358 of this title.