Finalized section 301 regulations


Authored by RSM US LLP

Treasury has just issued final regulations1 under section 301, effective Sept. 22, 2021, which adopt the proposed regulations2 released in March 2019, without any substantive changes. These regulations reflect the statutory changes made to section 301 pursuant to the Technical and Miscellaneous Revenue Act of 1988 (the Act)3. Generally, section 301 provides rules for the treatment of distributions of property, including money, made by a corporation to its shareholders with regard to that shareholder’s stock ownership in that corporation.

Before the Act was enacted, section 301(b)(1) had provided rules for determining the amount of a distribution of property depending on whether the shareholder receiving the distribution was, or was not, a corporation. Further pre-Act amendments to section 301(b)(1) added rules to determine the amount of distributions made from foreign distributing corporations to foreign corporate distributees. 

Once the Act was enacted in 1988, section 301(b)(1) broadly provided that the amount of any distribution, to any shareholder, was the amount of money received plus the fair market value of other property received. Section 301(d) was also amended to provide fair market value basis in the property received in a section 301(a) distribution.

Prior to the effective date of the final regulations, the section 301 regulations were based on the pre-Act variations of section 301, and as such contained obsolete provisions and did not reflect the current statutory provisions. Therefore, the proposed regulations were created to delete obsolete provisions, make minor additions and revisions to reflect current statutory text, and to make some non-substantive changes for purposes of clarity and readability. Most notably, the proposed and final regulations update the language of 1.301-1 to provide that the amount of a distribution of property made by a corporation to its shareholder is the fair market value of the distributed property. 

While the content of the final regulations is not surprising, they provide clarity and conformity to the statutory framework of section 301. Moreover, since this is merely updating for a legal change that occurred years ago, this finalized regulation is not a change in the law, rather it is just long-overdue housekeeping.


1T.D. 9954.


3Pub. L. 100-647, 102 Stat. 3342.

Let's Talk!

Call us at +1 213.873.1700, email us at or fill out the form below and we'll contact you to discuss your specific situation.

  • Topic Name:
  • Should be Empty:

This article was written by Mark Schneider, Nate Meyers and originally appeared on 2021-09-22.
2021 RSM US LLP. All rights reserved.

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

​Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.

For more information on how ​Vasquez & Company LLP can assist you, please call +1 213.873.1700.

Subscribe to receive important updates from our Insights and Resources.

  • Should be Empty: