26 CFR §1.382-10

1. (a)Distributions from qualified trusts
   1. (1)In general. For purposes of § 1.382-2T, if a qualified trust described in section 401(a) (qualified trust) distributes an ownership interest in an entity (as defined in § 1.382-3(a)(1)), then for testing dates on or after the date of the distribution, the distributed ownership interest is treated as having been acquired by the distributee on the date and in the manner acquired by the trust and not as having been acquired or disposed of by the trust. The distribution does not cause the day of the distribution to be a testing date.
   2. (2)Accounting for dispositions
      1. (i)General rule. For purposes of this paragraph (a), in order to determine which ownership interest in an entity is distributed from a qualified trust, a loss corporation must either specifically identify the ownership interests that are the subject of all dispositions by the qualified trust of ownership interests in an entity, or apply the first-in, first-out (FIFO) method to all such dispositions.
      2. (ii)Special rules. For purposes of this paragraph (a)(2):
         1. (A)The FIFO method must be applied on a class-by-class basis; and
         2. (B)The term dispositions includes distributions, sales, and other transfers.
   3. (3)Examples. The following examples illustrate the principles of this paragraph (a). For purposes of these examples, unless otherwise stated, the nomenclature and assumptions of the examples in § 1.382-2T(b) apply, all corporations file separate income tax returns on a calendar year basis, the only 5-percent shareholder of a loss corporation is a public group, and the facts set forth the only acquisitions of stock by any participants in a qualified plan and the only owner shifts with respect to the loss corporation during the testing period. The examples are as follows:
   4. (4)Effective dates. This section applies to all distributions after June 23, 2006. For distributions on or before June 23, 2006, see § 1.382-10T as contained in 26 CFR part 1, revised April 1, 2006.
2. (b)[Reserved]