Rev. Rul. 67-122

Section 351(d) of the Internal Revenue Code of 1954, as amended by section 203 of Title II of Public Law 89-809, C.B. 1966-2, 656, provides that, in the case of stock and securities to be issued by an investment company with respect to which a registration statement is required to be filed with the Securities and Exchange Commission, a transfer of property to an investment company shall be treated as made on or before June 30, 1967, only if (1) the registration statement was filed with the Securities and Exchange Commission before January 1, 1967, (2) the property transferred to the investment company includes only property deposited by the transferring taxpayers before May 1, 1967, and (3) the exchange of the deposited property for the stock and securities of the investment company is made on or before June 30, 1967, and the aggregate issue price of the stock and securities actually issued by the investment company in the exchange does not exceed the aggregate amount therefor specified in the registration statement as of the close of December 31, 1966.

Except as provided below, stock will be considered by the Internal Revenue Service to have been deposited before May 1, 1967, only if the designated depository or its authorized agents acquire physical possession of the stock certificates before such date.

Taxpayers have inquired about the effect of the deposit date cutoff on stock splits becoming effective, stock dividends payable, and stock received in certain exchanges, on or after May 1, 1967, with respect to stock deposited before that date. If a stock split becomes effective, a stock dividend is payable, or a depositor receives stock in an exchange qualifying under the provisions of section 354 or section 356 of the Code, with respect to stock deposited before May 1, 1967, the Revenue Service will consider such additional or substituted stock to have been deposited before May 1, 1967 if (1) the investment company's registration statement requires the taxpayer to deposit the additional or substituted stock, (2) the additional stock is taken into account in determining the value of the deposited stock for purposes of the exchange transaction, and (3) the stock split takes effect, the stock dividend is payable, or the exchange takes place, on or before June 30, 1967, whether or not the investment company acquires physical possession of the additional or substituted stock certificates on or before such date.

Taxpayers have also inquired about the extent to which a registration statement filed with the Securities and Exchange Commission before January 1, 1967, may be amended after that date without affecting the tax treatment of the exchange transaction. In general, any amendment of the registration statement may be made on or after January 1, 1967, provided that such amendment does not result in the offering of a new or a different security. Thus, for example, an amendment made to a registration statement on or after January 1, 1967, would not affect the tax treatment of the exchange transaction if (1) the amendment requires stock splits or stock dividends which become effective or are payable on or after May 1, 1967, with respect to stock deposited before the date, to be deposited by the transferring taxpayer and to be taken into account in determining the value of the deposited stock for purposes of the exchange transaction or (2) the amendment changes the amount of, or the method of computing, the sales charge in connection with the exchange transaction.

¹ Also released as Technical Information Release 896, dated Mar. 29, 1967.