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This document contains final regulations amending section 1.358-2, which provides guidance regarding the determination of the basis of stock or securities in a reorganization described in section 368(a)(1)(D) where no stock and/or securities of the acquiring corporation are issued and distributed in the transaction. These regulations clarify that, in a reorganization described in section 368(a)(1)(D) where no stock and/or securities of the acquiring corporation is issued and distributed in the transaction, the ability to designate the share of stock of the acquiring corporation to which the basis, if any, of the stock or securities surrendered will attach applies only to a shareholder that owns actual shares in the acquiring corporation.