Page:United States Statutes at Large Volume 53 Part 2.djvu/398

 PUBLIC LAWS-CH. 247-JUNE 29, 1939 Taxable years to (d) TAXABLE YEARS TO WHICH APPLICABLE.-The amendments made by subsections (a), (b), and (c) shall be applicable to taxable years beginning after December 31, 1938. sis under p ri or (e) BASIS UNDER PRIOR Acrs.- The following rules shall be ap- 52 Stat. 447. plied, for the purposes of the Revenue Act of 1938 or any prior revenue Act as if such rules were a part of each such Act when it was enacted, in determining the basis of property acquired by a share- holder in a corporation which consists of stock in such corporation, or rights to acquire such stock, acquired by him after February 28, 1913, in a distribution by such corporation (hereinafter in this subsection called "new stock"), or consisting of stock in respect of which such distribution was made (hereinafter in this subsection called "old stock") if the new stock was acquired in a taxable year beginning before January 1, 1936, or acquired in a taxable year be- ginning after December 31, 1935, and its distribution did not con- stitute income to the shareholder within the meaning of the Sixteenth Amendment to the Constitution: basis of new and of old (1) The basis of the new stock and of the old stock, respec- stock. tively, shall, in the shareholder's hands, be determined by allocat- ing between the old stock and the new stock the adjusted basis of the old stock; such allocation to be made under regulations which shall be prescribed by the Commissioner with the approval of the Secretary. chere esntire ps (2) Where the new stock consisted of rights to acquire stock wereincludedingross and such rights were sold and there was included in the gross inco me . income for the taxable year of the sale the entire amount of the asserted.f" d proceeds of such sale, then, if before the date of the enactment of this Act the taxpayer has not asserted (by claim for a refund or credit or otherwise) that any part of the proceeds of the sale of such new stock should be excluded from gross income for the year of its sale, the basis of the old stock shall be determined without regard to paragraph (1) and no part of the proceeds of the sale of such new stock shall ever be excluded from the gross income of the year of such sale. cable in certain cases. (3) Paragraph (1) shall not apply if the new stock was acquired in a taxable year beginning before January 1, 1936, and there was included, as a dividend, in gross income for such year an amount on account of such stock, and after such inclusion such amount was not (before the date of the enactment of this Act) excluded from gross income for such year. (4) Paragraph (1) shall not apply if the new stock or the old stock was sold or otherwise disposed of in a taxable year begin- ing before January 1, 1936, and the basis (determined by a deci- sion of a court or the Board of Tax Appeals, or a closing agree- ment, and the decision or agreement became final before the ninetieth day after the date of the enactment of this Act) for determining gain or loss on such sale or other disposition was ascertained by a method other than that of allocation of the basis of the old stock. der prior Actso pei (f) DIEERMINATION UNDER PRIOR ACTS OF PERIOD FOR WHICH odfor which held. HELD. -For the purposes of the Revenue Act of 1938 or any prior revenue Act, in determining the period for which the taxpayer has held stock or rights to acquire stock, received upon a distribution, if the basis of such stock or rights is determined under section 214 (e) (1) of the Revenue Act of 1939, there shall (under regulations which shall be prescribed by the Commissioner with the approval of the Secretary) be included the period for which he held the stock in the distributing corporation prior to the receipt of such stock or rights upon such distribution. This subsection shall be applicable as if it were a part of each such Act when such Act was enacted. 874 [53 STAT.

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