(e) Identification and date of acquisition by the distributing corporation of all property distributed under section 1101.

(f) Identification and date of acquisition by the distributing corporation of all property which was transferred to a new corporation under section 1101(c) (2) or (3).

If

(g) If the date of acquisition in paragraph (e) or (f) of this section was after May 15, 1955, a complete statement of details surrounding the acquisition. any of such property was acquired in a distribution under section 1101, a copy of the certification covering such distribution.

(h) A statement as to whether any of the distributions under section 1101 contained installment obligations, LIFO inventory, or property either subject to a liability in excess of its basis or in connection with the receipt of which any shareholder assumed a liability in excess of its basis. If so, the statement shall include complete details, including dates of distribution.

(i) [Reserved.]

(j) Fair market value of the distributing corporation's outstanding securities and stock per share immediately after a distribution.

(k) The amount of the undistributed earnings and profits of the distributing corporation accumulated after February 28, 1913, to date of transfer to a new corporation in an exchange to which section 1101 (c) (2) or (3) applies.

(1) If property was transferred to a new corporation under the provisions of section 1101 (c) (2) or (3), a statement giving the value of the assets transferred together with the value of assets retained. If cash was transferred, a complete substantiation thereof.

(m) If stock in a controlled corporation within the meaning of section 1102 (c) (3) is distributed under section 1101 (a) (1) or (b) (1), a statement giving the accumulated earnings and profits of the controlled corporation (or deficit in earnings as the case may be) immediately prior to the distribution.

(n) A copy of the final certification if issued to the distributing corporation by the Board pursuant to section 1101(e).

(0) The date of expiration of the period (including extensions thereof) prescribed in section 4(a) of the Bank Holding Company Act of 1956 (12 U.S.C.

1843(a)), or section 1101(e) (2) (B), whichever is applicable.

(p) A statement showing, for the 5year period preceding any exchange or distribution described in section 1101, the amount of income and expenditures attributable to each of the respective activities and holdings of the bank holding company and further showing the holdings and activities, after the distributions and exchanges described in section 1101, of the bank holding company and the corporations the stock of which is distributed under section 1101.

The periods of limitation (section 6501) with respect to any deficiency, including interest and additions to the tax, resulting solely from the receipt of property by shareholders in a distribution certified by the Board under subsection (a), (b), or (c) of section 1101 shall not expire until 5 years following the date of the notification required under section 1102(b) and this section.

[T.D. 6637, 28 F.R. 1764, Feb. 26, 1963] § 1.1102-3 Allocation of earnings and profits in certain distributions by qualified bank holding corporations. (a) Exchanges described in section 1101 (c) (2) or (3). Under section 1102(c), if a qualified bank holding corporation transfers property to a newly created corporation in exchange for all of its stock in a transaction described in section 1101(c) (2) (A) or (3) (A) and immediately thereafter the stock and securities of the controlled corporation are distributed in a distribution or exchange to which section 1101 (a) (2) or (b) (2) applies, the earnings and profits of the bank holding corporation immediately before the transaction shall be allocated between such bank holding corporation and the controlled corporation. Such allocation generally shall be made in proportion to the fair market value of the assets retained by the bank holding corporation and the assets of the controlled corporation immediately after the transaction. In a proper case, allocation shall be made in proportion to the net basis of the assets transferred and of the assets retained or by such other method as may be appropriate under the facts and circumstances of the case. The term "net basis" means the basis of the assets less liabilities assumed or liabilities to which such assets are subject. The part of the earnings and profits of the taxable year of

the bank holding corporation in which the transaction occurs allocable to the controlled corporation shall be included in the computation of the earnings and profits of the first taxable year of the controlled corporation ending after the date of the transaction.

(b) Distribution of stock in a controlled corporation under section 1101 (a) (1) or (b)(1). If a qualified bank holding corporation distributes stock of a controlled corporation (as defined in section 1102(c)(3)) in a distribution or exchange to which section 1101 (a) (1) or (b) (1) applies, the earnings and profits of the bank holding corporation shall be decreased by the lesser of the following amounts:

(1) The amount by which the earnings and profits of the bank holding corporation would have been decreased if it had transferred the stock of the controlled corporation to a new corporation in a transaction to which section 1101(c) (2) or (3) applied and immediately thereafter distributed the stock of such new corporation under section 1101 (a) (2) or (b) (2) or,

(2) The net worth of the controlled corporation. (For this purpose the term "net worth" means the sum of the bases of all of the properties plus cash minus all liabilities.)

If the earnings and profits of the controlled corporation immediately before the transaction are less than the amount of the decrease in earnings and profits of the bank holding corporation (including the case in which the controlled corporation has a deficit) the earnings and profits of the controlled corporation, after the transaction, shall be equal to the amount of such decrease. If the earnings and profits of the controlled corporation immediately before the transaction are more than the amount of the decrease in the earnings and profits of the bank holding corporation they shall remain unchanged.

(c) Deficits. A deficit of the distributing corporation shall in no case be allocated to a controlled corporation. [T.D. 6587, 27 F.R. 37, Jan. 4, 1962] § 1.1103 Statutory provisions; distributions pursuant to Bank Holding Company Act of 1956; definitions.

SEC. 1103. Definitions—(a) Bank holding company. For purposes of this part, the term "bank holding company" has the meaning assigned to such term by section 2 of the Bank Holding Company Act of 1956.

(b) Qualified bank holding corporation(1) In general. Except as provided in paragraph (2), for purposes of this part the term "qualified bank holding corporation" means any corporation (as defined in section 7701 (a) (3)) which is a bank holding company and which holds prohibited property acquired by it

(A) on or before May 15, 1955,

(B) In a distribution in which gain to such corporation with respect to the receipt of such property was not recognized by reason of subsection (a) or (b) of section 1101, or

(C) In exchange for all of its stock in an exchange described in section 1101 (c) (2) or (c) (3).

(2) Limitations. (A) A bank holding company shall not be a qualified bank holding corporation, unless it would have been a bank holding company on May 15, 1955, if the Bank Holding Company Act of 1956 had been in effect on such date, or unless it is a bank holding company determined solely by reference to

(1) Property acquired by it on or before May 15, 1955,

(ii) Property acquired by it in a distribution in which gain to such corporation with respect to the receipt of such property was not recognized by reason of subsection (a) or (b) of section 1101, and

(iii) Property acquired by it in exchange for all of its stock in an exchange described in section 1101 (c) (2) or (3).

(B) A bank holding company shall not be a qualified bank holding corporation by reason of property described in subparagraph (B) of paragraph (1) or clause (ii) of subparagraph (A) of this paragraph, unless such property was acquired in a distribution with respect to stock, which stock was acquired by such bank holding company(1) On or before May 15, 1955,

(ii) In a distribution (with respect to stock held by it on May 15, 1955, or with respect to stock in respect of which all previous applications of this clause are satisfied) with respect to which gain to it was not recognized by reason of subsection (a) or (b) of section 1101, or

(iii) In exchange for all of its stock in an exchange described in section 1101 (c) (2) or (3).

(C) A corporation shall be treated as a qualified bank holding corporation only if the Board certifies that it satisfies the foregoing requirements of this subsection.

(c) Prohibited property. For purposes of this part, the term "prohibited property" means, in the case of any bank holding company, property (other than nonexempt property) the disposition of which would be necessary or appropriate to effectuate section 4 of the Bank Holding Company Act of 1956 if such company continued to be a bank holding company beyond the period (including any extensions thereof) specified in subsection (a) of such section or in sec

tion 1101(e) (2) (B) of this part, as the case may be. The term "prohibited property" does not include shares of any company held by a bank holding company to the extent that the prohibitions of section 4 of the Bank Holding Company Act of 1956 do not apply to the ownership by such bank holding company of such property by reason of subsection (c) (5) of such section.

(d) Nonexempt property. For purposes of this part, the term "nonexempt property"

means

(1) Obligations (including notes, drafts, bills of exchange, and bankers' acceptances) having a maturity at the time of issuance

of not exceeding 24 months, exclusive of days of grace;

(2) Securities issued by or guaranteed as to principal or interest by a government or subdivision thereof or by any instrumentality of a government or subdivision; or

(3) Money, and the right to receive money not evidenced by a security or obligation (other than a security or obligation described in paragraph (1) or (2)).

(e) Board. For purposes of this part, the term "Board" means the Board of Governors of the Federal Reserve System. [Sec. 1103 as added by sec. 10(a), Bank Holding Company Act 1956 (70 Stat. 139)]