republic-os/legal/us/code/title-26/chapter-1/section-346.md

type, title, description, jurisdiction, corpus, kind, title_number, title_name, chapter_number, chapter_name, section, citation, status, release_point, release_date, source, source_url, source_identifier, source_file, source_hash, raw_snapshot_hash, text_hash, retrieved_at, confidence, tags

type	title	description	jurisdiction	corpus	kind	title_number	title_name	chapter_number	chapter_name	section	citation	status	release_point	release_date	source	source_url	source_identifier	source_file	source_hash	raw_snapshot_hash	text_hash	retrieved_at	confidence	tags
LegalText	26 U.S.C. § 346	Definition and special rule	us	united_states_code	code_section	26	INTERNAL REVENUE CODE	1	NORMAL TAXES AND SURTAXES	346	26 U.S.C. § 346	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc26@119-100.zip	/us/usc/t26/s346	data/legal/raw/us/code/title-26/usc26.xml	fc1658f68525008e0722ba3a19f30c919c9addac56823097c4365f28882d73de	a261f094809116f42a96648a3d5eee80fa010379d67412551c21dd5c900b27f4	cad6ec5ff1b21b7eb28f2c596651274f0adb2aa50ae9b7dcaa8d30594a1bddd1	2026-07-04	official	legal us-code

26 U.S.C. § 346 - Definition and special rule

Text

(a) Complete liquidation For purposes of this subchapter, a distribution shall be treated as in complete liquidation of a corporation if the distribution is one of a series of distributions in redemption of all of the stock of the corporation pursuant to a plan.

(b) Transactions which might reach same result as partial liquidations The Secretary shall prescribe such regulations as may be necessary to ensure that the purposes of subsections (a) and (b) of section 222 of the Tax Equity and Fiscal Responsibility Act of 1982 (which repeal the special tax treatment for partial liquidations) may not be circumvented through the use of section 355, 351, or any other provision of law or regulations (including the consolidated return regulations).

(Aug. 16, 1954, ch. 736, 68A Stat. 110; Pub. L. 97–248, title II, § 222(d), Sept. 3, 1982, 96 Stat. 479; Pub. L. 99–514, title VI, § 631(e)(7), Oct. 22, 1986, 100 Stat. 2273.)

Notes

Editorial Notes

References in TextSubsections (a) and (b) of section 222 of the Tax Equity and Fiscal Responsibility Act of 1982, referred to in subsec. (b), are subsecs. (a) and (b) of Pub. L. 97–248, title II, § 222, Sept. 3, 1982, 96 Stat. 478, which amended sections 331(a) and 336(a) of this title.

Amendments1986—Subsec. (b). Pub. L. 99–514 struck out “337,” after “351,”. 1982—Subsec. (a). Pub. L. 97–248 substituted provision that a distribution shall be treated as in complete liquidation if the distribution is one of a series in redemption of all the stock pursuant to a plan for provision that a distribution was to be treated as in partial liquidation if the distribution was one of a series in redemption of all the stock pursuant to a plan, or the distribution was not essentially equivalent to a dividend, was in redemption of part of the stock pursuant to a plan, and occurred within the taxable year or the next taxable year of the plan being adopted, including but not limited to a distribution which met the requirements of former subsec. (b) of this section, and that for the purposes of sections 562(b) and 6043 of this title, a partial liquidation included a redemption of stock to which section 302 of this title applied. Subsec. (b). Pub. L. 97–248 added subsec. (b) and struck out former subsec. (b) which provided that a distribution was to be treated as in partial liquidation of a corporation if the distribution was attributable to the cessation of a business which had been carried on for the previous 5-year period and had not been acquired by the corporation in a transaction involving recognition of gain or loss during that time, and if the distributing corporation was actively involved in a trade or business immediately after the distribution under the terms described above for the business being liquidated, and that compliance with the above requirements would be determined without regard to whether or not the distribution was pro rata with respect to all the shareholders of the corporation. Subsec. (c). Pub. L. 97–248 struck out subsec. (c) which provided that the fact that, with respect to a shareholder, a distribution qualified under section 302(a) by reason of section 302(b) would not be taken into account in determining whether the distribution, with respect to such shareholder, was also a distribution in partial liquidation of the corporation.

Statutory Notes and Related Subsidiaries

Effective Date of 1986 AmendmentAmendment by Pub. L. 99–514 applicable to any distribution in complete liquidation, and any sale or exchange, made by a corporation after July 31, 1986, unless such corporation is completely liquidated before Jan. 1, 1987, any transaction described in section 338 of this title for which the acquisition date occurs after Dec. 31, 1986, and any distribution, not in complete liquidation, made after Dec. 31, 1986, with exceptions and special and transitional rules, see section 633 of Pub. L. 99–514, set out as an Effective Date note under section 336 of this title.

Effective Date of 1982 AmendmentAmendment 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.