Page:United States Statutes at Large Volume 73.djvu/170

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PUBLIC LAW 86-69-JUNE 25, 1959

[73 S T A T.

" (B) ADJUSTMENT FOR CERTAIN DISTRIBUTIONS.—The excess described in subparagraph (A)(i) shall be reduced by the aggregate of the prior distributions which have been treated under subsection (a)(3) as made out of accounts other than the shareholders surplus account and the policyholders surplus account. " Subpart E^—Miscellaneous Provisions "Sec. "Sec. "Sec. "Sec.

817. Rules relating to. certain gains and losses. 818. Accounting provisions. 819. Foreign life insurance companies. 820. Optional treatment of policies reinsured under modified coinsurance contracts. "SEC. 817. RULES RELATING TO CERTAIN GAINS AND LOSSES. "'(a) TREATMENT OF CAPITAL GAINS AND LOSSES, E T C. — I n the case

of a life insurance company— 26 USC 1231. "(1) in applying section 1231(a), the term 'property used in the trade or business' shall be treated as including only— " (A) property used in carrying on an insurance business, of a character which is subject to the allowance for deprecia26 USC 167. tion provided in section 167, held for more than 6 months, and real property used in carrying on an insurance business, held for more than 6 months, which is not described in section 1231(b)(1)(A), (B), or (C), and " (B) property described in section 1231(b)(2), and 1221 " ^ ^ ^ 2 ^ *' " (2) in applying section 1221(2), the reference to property used in trade or business shall be treated as including only property used in carrying on an insurance business. " (b) G A I N ON PROPERTY HELD ON DECEMBER 31, 1958, AND CERTAIN SUBSTITUTED PROPERTY ACQUIRED AFTER 1958.— "(1) PROPERTY HELD ON DECEMBER S I, I 9 5 8. — I n the case of

property held by the taxpayer on December 31, 1958, if— " (A) the fair market value of such property on such date exceeds the adjusted basis for determining gain as of such date, and " (B) the taxpayer has been a life insurance company at all times on and after December 31, 1958, the gain on the sale or other disposition of such property shall be treated as an amount (not less than zero) equal to the amount by which the gain (determined without regard to this subsection) exceeds the difference between the fair market value on December 31, 1958, and the adjusted basis for determining gain as of such date. " (2) CERTAIN PROPERTY ACQUIRED AFTER DECEMBER S I, 1958.—

26 USC 1016.

26 USC 1223.

I n the case of property acquired after December 31, 1958, and having a substituted basis (within the meaning of section 1016 (b))" (A) for purposes of paragraph (1), such property shall be deemed held continuously by the taxpayer since the beginning of the holding period thereof, determined with reference to section 1223, " (B) the fair market value and adjusted basis referred to in paragraph (1) shall be that of that property for which the holding period taken into account includes December 31, 1958, " (C) paragraph (1) shall apply only if the property or properties the holding periods of which are taken into account were held only by life insurance companies after December 31, 1958, during the holding periods so taken into account,

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