qualified property

(2) Distribution of appreciated property (A) In general If— (i) in a distribution referred to in paragraph (1), the corporation distributes property other than qualified property, and (ii) the fair market value of such property exceeds its adjusted basis (in the hands of the distributing corporation), then gain shall be recognized to the distributing corporation as if such property were sold to the distributee at its fair market value. (B) Qualified property For purposes of subparagraph (A), the term “qualified property” means any stock or securities in the controlled corporation. (C) Treatment of liabilities If any property distributed in the distribution referred to in paragraph (1) is subject to a liability or the shareholder assumes a liability of the distributing corporation in connection with the distribution, then, for purposes of subparagraph (A), the fair market value of such property shall be treated as not less than the amount of such liability.

Source

26 USC § 355(c)(2)

---

Scoping language

None identified, default scope is assumed to be the parent (subpart B) of this section.

---

Is this correct? or