Page:United States Statutes at Large Volume 68A.djvu/336

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INTERNAL REVENUE CODE OF 1954

PART II—BASIS RULES OF GENERAL APPLICATION Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec.

1011. 1012. 1013. 1014. 1015. 1016. 1017. 1018.

Sec. 1019. Sec. 1020. Sec. 1021. Sec. 1022.

Adjusted basis for determining gain or loss. Basis of property—cost. Basis of property included in inventory. Basis of property acquired from a decedent. Basis of property acquired by gifts and transfers in trust. Adjustments to basis. Discharge of indebtedness. Adjustment of capital structure before September 22, 1938. Property on which lessee has made improvements. Election in respect of depreciation, etc., allowed before 1952. Sale of annuities. Cross references.

SEC. 1011. ADJUSTED BASIS FOR DETERMINING GAIN OR LOSS.

The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined under section 1012 or other applicable sections of this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses)), adjusted as provided in section 1016. SEC. 1012. BASIS OF PROPERTY—COST.

The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses). The cost of real property shall not include any amount in respect of real property taxes which are treated under section 164(d) as imposed on the taxpayer. SEC. 1013. BASIS OF PROPERTY INCLUDED IN INVENTORY.

If the property should have been included in the last inventory, the basis shall be the last inventory value thereof. SEC. 1014. BASIS OF PROPERTY ACQUIRED FROM A DECEDENT.

(a) IN GENERAL.—Except as otherwise provided in this section, the basis of property in the hands of a person acquiring the property from a decedent or to whom the property passed from a decedent shall, if not sold, exchanged, or otherwise disposed of before the decedent's death by such person, be the fair market value of the property a t the date of the decedent's death, or, in the case of an election under either section 2032 or section 811(j) of the Internal Revenue Code of 1939 where the decedent died after October 21, 1942, its value at the applicable valuation date prescribed by those sections. (b) PROPERTY ACQUIRED FROM THE D E C E D E N T. — For purposes of

subsection (a), the following property shall be considered to have been acquired from or to have passed from the decedent: (1) Property acquired by bequest, devise, or inheritance, or by the decedent's estate from the decedent; § 1011

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