Sec. 311. Taxability of corporation on distribution
 
 (a) General rule
 Except as provided in subsection (b), no gain or loss shall be
 recognized to a corporation on the distribution (not in complete
 liquidation) with respect to its stock of -
 (1) its stock (or rights to acquire its stock), or
 (2) property.
 (b) Distributions of appreciated property
 (1) In general
 If -
 (A) a corporation distributes property (other than an
 obligation of such corporation) to a shareholder in a
 distribution to which subpart A applies, and
 (B) 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.
 (2) Treatment of liabilities
 Rules similar to the rules of section 336(b) shall apply for
 purposes of this subsection.
 (3) Special rule for certain distributions of partnership or
 trust interests
 If the property distributed consists of an interest in a
 partnership or trust, the Secretary may by regulations provide
 that the amount of the gain recognized under paragraph (1) shall
 be computed without regard to any loss attributable to property
 contributed to the partnership or trust for the principal purpose
 of recognizing such loss on the distribution.