Page:United States Statutes at Large Volume 76.djvu/1083

 76 STAT.]

1035

PUBLIC LAW 87^34-OCT. 16, 1962

respect to expenses of mining in computing the taxable income from the property shall be decreased by an amount equal to so much of any gain which (1) is treated under section 1245 (relating to gain from disposition of certain depreciable property) as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231, and (2) is properly allocable to the property." (i) TECHNICAL AMENDMENTS.— (1) SPECIAL RULE FOR PARTNERSHIPS.—Section 751(c)

(relating

26 USC 1231.

26 USC 75 1.

to definition of "unrealized receivables" for purposes of subchapter K) is amended by adding after paragraph (2) the following: "For purposes of this section and sections 731, 736, and 741, such term also includes section 1245 property (as defined in section 1245 Ante, p. 1032. (a)(3)), but only to the extent of the amount which would be treated as gain to which section 1245(a) would apply if (at the time of the transaction described in this section or section 731, 736, or 741, as the case may be) such property had been sold by the partnership at its fair market value." (2) CORPORATE DISTRIBUTION OF HROFERTY.—Subsections (b)

and

(d) of section 301 (relating to amount distributed) are each amended by striking out "siibsection (b) or (c) of section 311" and inserting in lieu thereof "subsection (b) or (c) of section 311 or under section 1245(a)". (3) EFFECT ON EARNINGS AND PROFITS.—Section 312(c)(3) (relating to adjustments of earnings and profits) is amended by striking out "subsection (b) or (c) of section 311" and inserting in lieu thereof "subsection (b) or (c) of section 311 or under section 1245(a)'*. (4) COLLAPSIBLE CORPORATIONS.—Section 341(e)

(relating to

26 USC 341.

collapsible corporations) is amended by inserting after paragraph (11) the following new paragraph: "(12) NoNAPPLiCATioN OF SECTION 1245(a).—For purposes of this subsection, the determination of whether gain from the sale or exchange of property would under any provision of this chapter be considered as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231 (b) shall be made without regard to the application of section 1245(a)." (5) INSTALLMENT OBLIGATIONS I N CERTAIN LIQUIDATIONS.—

"*.;.

(A) Section 4 5 3 (d)(4)(A) (relating to distribution of installment obligations in section 332 liquidations) is amended by adding at the end thereof the following new 3 sentence: " I f the basis of the property of the liquidating '• corporation in the hands of the distributee is determined under section 334(b)(2) then the preceding sentence shall not apply to the extent that under paragraph (1) gain to the distributing corporation would be considered as gain to which section 1245(a) applies." (B) Section 4 5 3 (d)(4)(B) (relating to distribution of ' installment obligations in liquidations to which section 337 t applies) is amended by adding at the end thereof the following new sentence: "The preceding sentence shall not apply to the extent that under paragraph (1) gain to the distributing corporation would be considered as gain to which section 1245(a) applies." (g) EFFECTIVE DATES.—The amendments made by this section (other than the amendments made by subsection (c)) shall apply to taxable years beginning after December 31, 1962. The amendments

..Ji-^-t

�