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(c) are set forth in the margin.3 If the distribution does not
3 SEC. 355. DISTRIBUTION OF STOCK AND SECURITIES
OF A CONTROLLED CORPORATION.
(a) Effect on Distributees.--
(1) General Rule.--If--
(A) a corporation (referred to in this
section as the "distributing corporation")
(i) distributes to a shareholder, with
respect to its stock, * * *
* * * * * * *
solely stock or securities of a corporation
(referred to in this section as "controlled
corporation") which it controls immediately before
the distribution,
(B) the transaction was not used principally
as a device for the distribution of the
earnings and profits of the distributing
corporation or the controlled corporation or
both * * *
(C) the requirements of subsection (b)
(relating to active businesses) are
satisfied, and
(D) as part of the distribution, the
distributing corporation distributes--
(i) all of the stock and securities in the
controlled corporation held by it immediately
before the distribution, * * *
* * * * * * *
then no gain or loss shall be recognized to (and
no amount shall be includible in the income of)
such shareholder or security holder on the receipt
of such stock or securities.
(continued...)
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