Page:United States Statutes at Large Volume 52.djvu/534

 52 STAT.] 75TH CONG. , 3D SESS.-CH. 289-MAY 28, 1938 determined under any other paragraph of this subsection, then Basis. 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 transferor upon such transfer under the law applicable to the year in which the transfer was made. If the property was distributed in kind by a partnership aDistribuion to any partner, the basis of such property in the hands of the nrs partner shall be such part of the basis in his hands of his partner- ship interest as is properly allocable to such property. (14) PROPERTY ACQUIRED BEFORE MARCH 1, 1913.- In the case Property ac of property acquired before March 1, 1913, if the basis otherwise before March determined under this subsection, adjusted (for the period prior to March 1, 1913) as provided in subsection (b), is less than the fair market value of the property as of March 1, 1913, then the basis for determining gain shall be such fair market value. In aDeiterminat determining the fair market value of stock in a corporation stock. as of March 1, 1913, due regard shall be given to the fair market value of the assets of the corporation as of that date. (15) PROPERTY RECEIVED BY A CORPORATION ON COMPLETE LIQUI- byPropert r DATION OF ANOTHER.-I f the property was received by a corpora- complete liqui of another. tion upon a distribution in complete liquidation of another corpo- Ante, p. 485. ration within the meaning of section 112 (b) (6), then the basis shall be the same as it would be in the hands of the transferor. The basis of property with respect to which election has been RBeaestActbs made in pursuance of the last sentence of section 113 (a) (15) of 49 stat. 1684 . the Revenue Act of 1936, as amended, shall, in the hands of the corporation making such election, be the basis prescribed in the Revenue Act of 1934, as amended. 48 Stat. 680 . (16) BASIS ESTABLISHED BY REVENUE ACT OF 1934.- If the Basis establis property was acquired, after February 28, 1913, in any taxable Revenue Act year beginning prior to January 1, 1936, and the basis thereof, for the purposes of the Revenue Act of 1934 was prescribed by section 113 (a) (6), (7), or (8) of such Act, then for the pur- 48stat.706. poses of this Act the basis shall be the same as the basis therein prescribed in the Revenue Act of 1934. (17) PROPERTY ACQUIRED IN CONNECTION WITH EXCHANGES AND Property ac in connection v DISTRIBUTIONS IN OBEDIENCE TO CERTAIN ORDERS OF SECURITIES AND changes and di EXCHANGE COMMISSION.-If the property was acquired in any orrof8ecur manner described in section 372, the basis shall be that prescribed Exchange Co slon. in such section with respect to such property. Post, p. 5. (18) PROPERTY RECEIVED IN CERTAIN CORPORATE LIQUIDATIONS.-- Property If the property was acquired by a shareholder in the liquidation liquidationss. of a corporation in cancellation or redemption of stock with respect to which gain was realized, but with respect to which, as the result of an election made by him under paragraph (7) of section 112 (b), the extent to which gain was recognized was Ante,p.487. determined under such paragraph, then the basis shall be the same as the basis of such stock cancelled or redeemed in the liquidation, decreased in the amount of any money received by him, and increased in the amount of gain recognized to him. (b) ADJUSTED BAsIs.- The adjusted basis for determining the gain deternning g or loss from the sale or other disposition of property, whenever loss - acquired, shall be the basis determined under subsection (a), adjusted Ante p. 490. as hereinafter provided. (1) GENERAL RULE. - Proper adjustment in respect of the prop- General rule. erty shall in all cases be made- (A) for expenditures, receipts, losses, or other items, chargeantur properly chargeable to capital account, including taxes and account. other carrying charges on unimproved and unproductive real property, but no such adjustment shall be made for taxes Restriction by part- cquired 1, 1913. on of lue of eceived ion on idation hed by of 1936. hed by of 1934. quired with ex- stribu- Ince to les and mmis- eceived rporate sis for ain or, etc., capital 493

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