26 U.S.C. § 997 : Internal Revenue Code — Income Taxes — Normal Taxes And Surtaxes — Tax Based On Income From Sources Within Or Without The United States — Domestic International Sales Corporations — Treatment Of Distributions To Shareholders — Special Subchapter C Rules

For purposes of applying the provisions of subchapter C of chapter 1, any distribution in property to a corporation by a DISC or former DISC which is made out of previously taxed income or accumulated DISC income shall—

(1) be treated as a distribution in the same amount as if such distribution of property were made to an individual, and

(2) have a basis, in the hands of the recipient corporation, equal to the amount determined under paragraph (1).

(Added Pub. L. 92–178, title V, § 501, Dec. 10, 1971, 85 Stat. 549.)