ACQUISITION OF STOCK IN EXCHANGE FOR STOCK OF CORPORATION WHICH IS IN CONTROL OF ACQUIRING CORPORATION.

SEC. 218. ACQUISITION OF STOCK IN EXCHANGE FOR STOCK OF CORPORATION WHICH IS IN CONTROL OF ACQUIRING CORPORATION. (a) Definition of Reorganization.—Section 368(a)(1) (relating to definition of reorganization) is amended by inserting after “voting stock” in subparagraph (B) “(or in exchange solely for all or a part of the voting stock of a corporation which is in control of the requiring corporation)”. (b) Technical Amendments.— (1) Section 368(a)(2)(C) (relating to special rules) is amended to read as follows: “(C) Transfers of assets or stock to subsidiaries in certain paragraph (1) (a), (1) (b), and (1)(c) cases.—A transaction otherwise qualifying under paragraph (1)(A), (1) (B), or (1) (C) shall not be disqualified by reason of the fact that part or all of the assets or stock which were acquired in the transaction are transferred to a corporation controlled by the corporation acquiring such assets or stock.” (2) Section 368(b) (relating to definition of party to a reorganization) is amended by striking out the last two sentences and inserting in lieu thereof the following: “In the case of a reorganization qualifying under paragraph (1)(B) or (1)(C) of subsection (a), if the stock exchanged for the stock or properties is stock of a corporation which is in control of the acquiring corporation, the term ‘a party to a reorganization’ includes the corporation so controlling the acquiring corporation. In the case of a reorganization qualifying under paragraph (1) (A), (1) (B), or (1)(C) of subsection (a) by reason of paragraph (2) (C) of subsection (a), the term ‘a party to a reorganization’ includes the corporation controlling the corporation to which the acquired assets or stock are transferred.” (c) Effective Date.—The amendments made by this section shall apply with respect to transactions after December 31, 1963, in taxable years ending after such date.