26 U.S.C. § 997

For purposes of applying the provisions of subchapter C of chapter 1, any distribution in property to a corporation by a DISC or former DISC which is made out of previously taxed income or accumulated DISC income shall— (1) be treated as a distribution in the same amount as if such distribution of property were made to an individual, and (2) have a basis, in the hands of the recipient corporation, equal to the amount determined under paragraph (1).