Page:United States Statutes at Large Volume 111 Part 1.djvu/857

 PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 833 "(4) ADJUSTED NET CAPITAL GAIN.— For purposes of this subsection, the term 'adjusted net capital gain' means net capital gain determined without regard to— " (A) collectibles gain, "(B) unrecaptured section 1250 gain, "(C) section 1202 gain, and "(D) mid-term gain. "(5) COLLECTIBLES GAIN.— For purposes of this subsection— "(A) IN GENERAL.— The term 'collectibles gain' means gain from the sale or exchange of a collectible (as defined in section 408(m) without regard to paragraph (3) thereof) which is a capital asset held for more than 1 year but only to the extent such gain is taken into account in computing gross income. "(B) PARTNERSHIPS, ETC. —For purposes of subparagraph (A), any gain from the sale of an interest in a partnership, S corporation, or trust which is attributable to unrealized appreciation in the value of collectibles shall be treated as gain from the sale or exchange of a collectible. Rules similar to the rules of section 751 shall apply for purposes of the preceding sentence. "(6) UNRECAPTURED SECTION 1250 GAIN. — For purposes of this subsection— "(A) IN GENERAL. — The term 'unrecaptured section 1250 gain' means the amount of long-term capital gain which would be treated as ordinary income if— "(i) section 1250(b)(1) included all depreciation and the applicable percentage under section 1250(a) were 100 percent, and "(ii) in the case of gain properly taken into account after July 28, 1997, only gain from section 1250 property held for more than 18 months were taken into account. "(B) LIMITATION WITH RESPECT TO SECTION 1231 PROP- ERTY.— The amount of unrecaptured section 1250 gain from sales, exchanges, and conversions described in section 1231(a)(3)(A) for any taxable year shall not exceed the excess of the net section 1231 gain (as defined in section 1231(c)(3)) for such year over the amount treated as ordinary income under section 1231(c)(1) for such year. "(C) PRE-MAY 7, 1997, GAIN. —In the case of a taxable year which includes May 7, 1997, subparagraph (A) shall be applied by taking into account only the gain properly taken into account for the portion of the taxable year after May 6, 1997. "(7) SECTION 1202 GAIN.— For purposes of this subsection, the term 'section 1202 gain' means an amount equal to the gain excluded from gross income under section 1202(a). "(8) MID-TERM GAIN.— For purposes of this subsection, the term 'mid-term gain' means the amount which would be adjusted net capital gain for the taxable year if— - "(A) adjusted net capital gain were determined by taking into account only the gain or loss properly taken into account after July 28, 1997, from property held for more than 1 year but not more than 18 months, and "(B) paragraph (3) and section 1212 did not apply.

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