Page:United States Statutes at Large Volume 72 Part 1.djvu/1713

 72 S T A T. ]

PUBLIC LAW 8 5 - 8 6 6 - S E P T. 2, 1968

was acquired, if the basis of such property is determined by reference to its basis in the hands of such person. Where a series of transfers of property has occurred and where in each instance the basis of the property was determined by reference to its basis in the hands of the prior holder, the term includes each such prior holder. (6) The term "Secretary"' means the Secretary of the Treasurj^ or his delegate. (7) The term '"Commissioner" means the Commissioner of Internal Revenue. SEC. 95. AMENDMENTS TO 1954 CODE WITH RESPECT TO PROPERTY ACQUIRED FROM RETIREMENT METHOD CORPORATION. (a) GENERAL RULE,—Section 372 of the Internal Revenue Code of 1954 (relating to basis in connection with certain receivership and bankruptcy proceedings) is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection:

1671

26 USC 372.

" (b) ADJUSTMENT FOR DEPRECIATION SUSTAINED BEFORE MARCH 1, 1913, IN CERTAIN CASES OF PROPERTY ACQUIRED FROM RETIREMENT METHOD (CORPORATIONS.—

"(1) IN GENERAL.—If the taxpayer has acquired property in a transaction described in section 373(b) or 374 (b), and if any such property constitutes retirement-straight line property, then, in determining the adjusted basis of all retirement-straight line property heldlby the taxpayer on his adjustment date, adjustment shall be made (m lieu of the adjustment provided in section 1016 (a)(3)(A)) for depreciation sustained before March 1, 1913, on retirement-straight line property which was held on such date for which cost was or is claimed as basis, and which either— "(A)

RETIRED BEFORE ACQUISITION BY TAXPAYER.—Was re-

tired before the acquisition of the retirement-straight line property by the taxpayer, but only if a deduction was allowed in computing net income by reason of such retirement, and such deduction was computed on the basis of cost without adjustment for depreciation sustained before March 1, 1913. In the case of any such property retired during any taxable year beginning after December 31, 1929, the adjustment under this subparagraph shall not exceed that portion of the amount attributable to depreciation sustained before March 1, 1913, which resulted (by reason of the deduction so allowed) in a reduction in taxes under this subtitle or prior income, war-profits, or excess-profits tax laws. " (B) ACQUIRED BY TAXPAYER.—Was acquired by the taxpayer. The adjustment determined under this paragraph shall be allocated (in the manner prescribed by the Secretary or his delegate) among all retirement-straight line property held by the taxpayer on his adjustment date. Such adjustment shall apply to all periods on and after the adjustment date. "(2) RETIREMENT-STRAIGHT LINE PROPERTY DEFINED.—For purposes of this subsection, the term 'retirement-straight line property' means any property of a kind or class with respect to which (A) the corporation transferring such property to the taxpayer was using (at the time of transfer) the retirement method of computing the allowance of deductions for depreciation, and (B) the acquiring corporation has adopted any other method of computing such allowance.

26 USC 373,374.

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