A distributing corporation distributes solely stock or securities of a controlled corporation.Gain or loss is recognized by the distributing corporation.

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In a distribution of stock or securities of a controlled corporation, the distributing corporation generally does not recognize gain or loss under U.S. tax law. This is part of the tax-free reorganization provisions, specifically under Section 355 of the Internal Revenue Code.

A Distributing Corporation Distributes Solely Stock or Securities of a Controlled