Page:United States Statutes at Large Volume 68A.djvu/342

 302

INTERNAL REVENUE CODE OF 1954

in respect of such property was included in gross income of the lessor for any taxable year beginning before January 1, 1942, the basis of each portion of such property shall be properly adjusted for the amount so included in gross income. SEC. 1020. ELECTION IN RESPECT OF DEPRECIATION, ETC., ALLOWED BEFORE 1952.

Any person may elect to have subparagraph (B) of section 1016(a) (2) apply in respect of periods since February 28, 1913, and before January 1, 1952. Such an election shall be made in such manner as the Secretary or his delegate may by regulations prescribe and shall be irrevocable when made, except that an election made on or before December 31, 1952, may be revoked at any time before January 1, 1955. A revocation of an election shall be made in such manner as the Secretary or his delegate may by regulations prescribe, and no election may be made by any person after he has so revoked an election. The election shall apply in respect of all property held by the person making the election at any time on or before December 31, 1952, and in respect of all pe'riods since February 28, 1913, and before January 1, 1952, during which such person held such property or for which adjustments must be made under section 1016(b). An election or a revocation of an election by a transferor, donor, or grantor made after the date of the transfer, gift, or grant of property shall not affect the basis of such property in the hands of the transferee, donee, or grantee. No election may be made under this section after December 31, 1954. SEC. 1021. SALE OF ANNUITIES. In case of the sale of an annuity contract, the adjusted basis shall in no case be less than zero. SEC. 1022. CROSS REFERENCES. (1) For certain distributions by a corporation which are applied in reduction of basis of stock, see section 301(c)(2). (2) For basis of property in case of certain reorganizations and arrangements under the Bankruptcy Act, see sections 270, 396, and 522 of that Act, as amended (11 U.S.C. 670, 796, 922). (3) For basis in case of construction of new vessels, see section 511 of the Merchant Marine Act, 1936, as amended (46 U.S.C. 1161). (4) For rules applicable in case of payments in violation of Defense Production Act of 1950, as amended, see section 405 of that Act.

PART III—COMMON NONTAXABLE EXCHANGES Sec. 1031. Exchange of property held for productive use or investment. Sec. 1032. Exchange of stock for property. Sec. 1033. Involuntary conversions. Sec. 1034. Sale or exchange of residence. Sec. 1035. Certain exchanges of insurance policies. Sec. 1036. Stock for stock of same corporation. SEC. 1031. EXCHANGE OF PROPERTY HELD FOR PRODUCTIVE USE OR INVESTMENT. (a) NONRECOGNITION OF G A I N OR LoSS F R O M EXCHANGES SoLELY

IN K I N D. — N o gain or loss shall be recognized if property held for productive use in trade or business or for investment (not including stock in trade or other property held primarily for sale, nor stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest) is exchanged § 1019

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