### Question
How does Income Taxes define recently purchased stock?


### Answer
Under *26 U.S.C. § 338*, **recently purchased stock** is defined as:

> any stock in the target corporation which is held by the purchasing corporation on the acquisition date and which was purchased by such corporation during the 12-month acquisition period

#### Citation:
  - *26 U.S.C. § 338*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter C-Corporate Distributions and Adjustments > PART II-CORPORATE LIQUIDATIONS > Subpart B-Effects on Corporation**

