Rev. Rul. 79-3

Advice has been requested concerning when the 12-month period referred to in section 337 ends.

Section 337(a) of the Internal Revenue Code of 1954 provides that if a corporation adopts a plan of complete liquidation and within the 12-month period beginning on the date of the adoption of such plan all of the assets of the corporation, less assets retained to meet claims, are distributed in complete liquidation, then no gain or loss shall be recognized to such corporation from the sale or exchange by it of property within such 12-month period. Section 337(c)(2), concerning sales and exchanges made by an affiliated corporation that subsequently liquidates, also refers to a 12-month period beginning on the date of the adoption of a plan of complete liquidation.

If the day of adoption of a plan of liquidation is other than the first day of a month, the 12-month period referred to in section 337 of the Code will end at 12 o'clock midnight of the day in the corresponding month of the following calendar year that comes immediately before the day on which the plan was adopted. For example, if the plan of liquidation is adopted on October 17, 1977, the 12-month period ends at 12 o'clock midnight of October 16, 1978.

If the day of adoption of a plan of liquidation is on the first day of a month, the 12-month period referred to in section 337 will end at 12 o'clock midnight of the last day of the eleventh calendar month following the calendar month of adoption of the plan. For example, if the plan of liquidation is adopted on April 1, 1978, the 12-month period ends at 12 o'clock midnight of March 31, 1979.