Page:United States Statutes at Large Volume 48 Part 1.djvu/733

 73d C ONGRESS. SESS. II. CH. 277 . MAY 10, 1934 . 707 the case of the p ropert y exc hange d, dec rease d in the am ount of cCO ME TAX any money received by the taxpayer and incre ased in the amou nt OF NET INOOME - of gain or decreased in the amount of loss to the taxpayer that Oontd ' was recognized upon such exchange under the law applicable to Partly on exchange and partly by other the year in which the exchange was made. If the prope rty SO property. acquired consisted in part of the type of property permitted by section 112(b) to be received without the recognition of gain or loss, and in part of other property, the basis provided in this paragraph shall be allocated between the properties (other than money) received, and for the purpose of the allocation there shall be ass igned to such other property an amoun t equ ivalen t to its fair market value at the date of the exchange. This pa ragraph sid Sto ck ex excepted.Con shall not apply to property acquired by a corporation by the issuance of its stock or securities as the consideration in whole or in part for the transfer of the property to it. (7) TRANSFERS TO COR POR ATIO N WHERE C ONT ROL OF PROPERTY Transf ers to corpor a- REMAINS IN SAME PERSONS .-If the property was acquired after lion where control of property remains in December 31, 1917, by a corporation in connection with a reorgani- same p ersons. zation, and immediately after the transfer an interest or control in such pro pe rty of 50 per centum or m ore remained in the same person s or any of them, then the basis shal l be the same as it would be in the hands of the transferor, increased in the amount of gain or decreased in the amount of loss recognized to the trans- feror upon such transfer under the law applicable to the year in whi ch the tra nsf er was made. This paragraph shall not apply if nay atoorp orattio the property acquired consists of stock or securities in a corpora- tion. tion a party to the reorganization, unless acquired by the issuance of stock or securities of the transferee as the consideration in whole or in part for the transfer. (8) PROPERTY ACQUIRED BY ISSUANCE OF ST OCK OR AS PAID -IN Property acquired by issuance of stock or as SURPL US .-If t he pr opert y was acquired after December 31, 1920, paid-in surplus, by a by a corporation- corporation after 1 0020. (A) by the issuance of its stock or securities in connection Issuance of sto ck with a transaction described in section 112(b) (5) (including controlled by trans- also, cases where part of the consideration for the transfer o Ante, p 704 . such prop erty to the corporation was property or money, in addition to such stock or securities), or (B) as paid-in surplus or as a contribution to capital, Paid- in surp lus, e tc. then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain or decreased in the amount of loss recognized to the trans feror upon such trans fer under the law applicable to the year in which the transfer was made. (9) INVOLUNTARY CONVERSION .-If the property was acquired, Acquired by mvol- after February 28, 1913, as th e result of a co mpulsory or invo luntary ornery conve rsion. conversion described in section 112 (f), the basis shall be the same as in the case of the property so converted, decreased in the amount of any money received by the taxpayer which was not ex pended in accordance with the provisions of law (applicable to the ye ar in which such conversion was made) determining the taxable status of the gain or loss upon such conversion, and increased in the amount of gain or decre ased in the amount of loss to the taxpayer recognized upon such conversion under the law appli- cable to the year in which such conversion was made. (10) WASH SALES OF STOCK.-If the property consists of stock wash sales of stock on which loss not or securities the acquisition of which (or the contract or option allowed. 715 to acquire which) resulted in the nondeductibility (under section 118 of this Act or corresponding provisions of prior income tax