Reg. § 1.355-5 Records to be kept and information to be filed.
(a) Distributing corporation
(1) In general Every corporation that makes a distribution (the distributing corporation) of stock or securities of a controlled corporation, as described in section (or so much of section as relates to section ), must include a statement entitled, “STATEMENT PURSUANT TO BY [INSERT NAME AND EMPLOYER IDENTIFICATION NUMBER (IF ANY) OF TAXPAYER], A DISTRIBUTING CORPORATION,” on or with its return for the year of the distribution. If the distributing corporation is a controlled foreign corporation (within the meaning of section ), each United States shareholder (within the meaning of section ) with respect thereto must include this statement on or with its return. The statement must include—
(i) The name and employer identification number (if any) of the controlled corporation;
(ii) The name and taxpayer identification number (if any) of every significant distributee;
(iii) The date of the distribution of the stock or securities of the controlled corporation;
(iv) The aggregate fair market value and basis, determined immediately before the distribution or exchange, of the stock, securities, or other property (including money) distributed by the distributing corporation in the transaction; and
(v) The date and control number of any private letter ruling(s) issued by the Internal Revenue Service in connection with the transaction.
(2) Special rule when an asset transfer precedes a stock distribution If the distributing corporation transferred property to the controlled corporation in a transaction described in section or , as part of a plan to then distribute the stock or securities of the controlled corporation in a transaction described in section (or so much of section as relates to section ), then, unless of this section applies, the distributing corporation must also include on or with its return for the year of the distribution the statement required by or -3(a). If the distributing corporation is a controlled foreign corporation (within the meaning of section ), each United States shareholder (within the meaning of section ) with respect thereto must include the statement required by or -3(a) on or with its return.
(b) Significant distributee Every significant distributee must include a statement entitled, “STATEMENT PURSUANT TO BY [INSERT NAME AND TAXPAYER IDENTIFICATION NUMBER (IF ANY) OF TAXPAYER], A SIGNIFICANT DISTRIBUTEE,” on or with such distributee's return for the year in which such distribution is received. If a significant distributee is a controlled foreign corporation (within the meaning of section ), each United States shareholder (within the meaning of section ) with respect thereto must include this statement on or with its return. The statement must include—
(1) The names and employer identification numbers (if any) of the distributing and controlled corporations;
(2) The date of the distribution of the stock or securities of the controlled corporation; and
(3) The aggregate basis, determined immediately before the exchange, of any stock or securities transferred by the significant distributee in the exchange, and the aggregate fair market value, determined immediately before the distribution or exchange, of the stock, securities or other property (including money) received by the significant distributee in the distribution or exchange.
(c) Definitions For purposes of this section:
(1) Significant distributee means—
(i) A holder of stock of a distributing corporation that receives, in a transaction described in section (or so much of section as relates to section ), stock of a corporation controlled by the distributing corporation if, immediately before the distribution or exchange, such holder—
(A) Owned at least five percent (by vote or value) of the total outstanding stock of the distributing corporation if the stock owned by such holder is publicly traded; or
(B) Owned at least one percent (by vote or value) of the stock of the distributing corporation if the stock owned by such holder is not publicly traded; or
(ii) A holder of securities of a distributing corporation that receives, in a transaction described in section (or so much of section as relates to section ), stock or securities of a corporation controlled by the distributing corporation if, immediately before the distribution or exchange, such holder owned securities in such distributing corporation with a basis of $1,000,000 or more.
(2) Publicly traded stock means stock that is listed on—
(i) A national securities exchange registered under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f); or
(ii) An interdealer quotation system sponsored by a national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3).
(d) Substantiation information Under , taxpayers are required to retain their permanent records and make such records available to any authorized Internal Revenue Service officers and employees. In connection with the distribution or exchange described in this section, these records should specifically include information regarding the amount, basis, and fair market value of all property distributed or exchanged, and relevant facts regarding any liabilities assumed or extinguished as part of such distribution or exchange.
(e) Effective/applicability date This section applies to any taxable year beginning on or after May 30, 2006. However, taxpayers may apply this section to any original Federal income tax return (including any amended return filed on or before the due date (including extensions) of such original return) timely filed on or after May 30, 2006. For taxable years beginning before May 30, 2006, see as contained in 26 CFR part 1 in effect on April 1, 2006.
[T.D. 9329, 72 FR 32799, June 14, 2007]