Page:United States Statutes at Large Volume 68A.djvu/379

 CH. 1—NORMAL TAXES AND SURTAXES

339

(6) B A S I S OF PROPERTY AFTER ERRONEOUS TREATMENT OF A PRIOR TRANSACTION. (A) GENERAL RULE.—The determination determines the basis

of property, and in respect of any transaction on which such basis depends, or in respect of any transaction which was erroneously treated as affecting such basis, there occurred, with respect to a taxpayer described in subparagraph (B) of this paragraph, any of the errors described in subparagraph (C) of this paragraph, (B)

TAXPAYERS WITH RESPECT TO WHOM THE ERRONEOUS

TREATMENT OCCURRED.—The taxpayer with respect to whom the erroneous treatment occurred must be— (i) the taxpayer with respect to whom the determination is made, (ii) a taxpayer who acquired title to the property in the transaction and from whom, mediately or immediately, the taxpayer with respect to whom the determination is made derived title, or (iii) a taxpayer who had title to the property at the time of the transaction and from whom, mediately or immediately, the taxpayer with respect to whom the determination is made iii l> derived title, if the basis of the property in the hands of the taxpayer with respect to whom the determination is made is determined under section 1015(a) (relating to the basis of property acquired by gift). (C) P R I O R ERRONEOUS TREATMENT.—With respect to a taxpayer described in subparagraph (B) of this paragraph— I (i) there was an erroneous inclusion in, or omission from, gross income, (ii) there was an erroneous recognition, or nonrecognition, ^:.of gain or loss, or (iii) there was an erroneous deduction of an item properly chargeable to capital account or an erroneous charge to capital account of an item properly deductible. SEC. 1313. DEFINITIONS. (a) DETERMINATION.—For purposes of this part, the term "determination" means— (1) a decision by the Tax Court or a judgment, decree, or other order by any court of competent jurisdiction, which has become final; (2) a closing agreement made under section 7121; (3) a final disposition by the Secretary or his delegate of a claim for refund. For purposes of this part, a claim for refund shall be deemed finally disposed of by the Secretary or his delegate— (A) as to items with respect to which the claim was allowed, on the date of allowance of refund or credit or on the date of mailing notice of disallowance (by reason of offsetting items) of the claim for refund, and (B) as to items with respect to which the claim was disallowed, in whole or in part, or as to items applied by the Secretary or his delegate in reduction of the refund or credit, on expiration of the time for instituting suit with respect thereto (unless suit is instituted before the expiration of such time); or § 1313(a)(3)(B)

�