Treasury Regulations, Subchapter A, Sec. 1.341-1
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Sec. 1.341-1 Collapsible corporations; in general
Subject to the limitations contained in §1.341–4 and the exceptions contained in §1.341–6 and §1.341–7(a), the entire gain from the actual sale or exchange of stock of a collapsible corporation, (b) amounts distributed in complete or partial liquidation of a collapsible corporation which are treated, under section 331, as payment in exchange for stock, and (c) a distribution made by a collapsible corporation which, under section 301(c)(3), is treated, to the extent it exceeds the basis of the stock, in the same manner as a gain from the sale or exchange of property, shall be considered as ordinary income.
[T.D. 7655, 44 FR 68459, Nov. 29, 1979]
