Page:United States Statutes at Large Volume 78.djvu/135

 78 STAT. ]

PUBLIC LAW 88-272-FEB. 26, 1964

93

subsection (c)(2) as the appreciation in value of.such share or security bears to the aggregate appreciation in vahie of all such shares and securities having appreciation in value. "(c) SPECIAL RULES AND DEFiNmoNS.—For purposes of this section— "(1) FEDERAL ESTATE TAX.—The term 'Federal estate tax' means only the tax imposed by section 2001 or 2101, reduced by any 68Au Stat. 373. 26 s e 2001, credit allowable with respect to a tax on prior transfers by section 210I 2013 or 2102. " ^l^^^"" 2013. "(2)

FEDERAL ESTATE TAX ATTRIBUTABLE TO XET APPRECIATION

IN VALUE.—The Federal estate tax attributable to the net appreciation in value of all shares of stock and securities to which subsection (a) applies is that amount which bears the same ratio to the Federal estate tax as the net appreciation in value of all of such shares and securities bears to the value of the gross estate as determined under chapter 11 (including section 2032, relating to ^^ "^^ 2°^^. alternate valuation). "(3) NET APPRECIATION.—The net appreciation in value of all shares and securities to which subsection (a) applies is the amount by which the fair market value of all such snares and securities exceeds the adjusted basis of such property in the hands of the decedent. "(4) FAIR MARKET VALUE.—For purposes of this section, the term 'fair market value' means fair market value determined under chapter 11 (including section 2032, relating to alternate 2209.^^^ ^°°^" valuation). '*(d) LIMITATIONS.—This section shall not apply to any foreign 26 USC 342. personal holding company referred to in section 342(a)(2).'' (2) AMENDMENT OF SECTION 101 (Ma).—Section 1016(a) (re- 26 USC/o^^ lating to adjustments to basis) is amended by striking out the period at the end thereof and by inserting in lieu thereof a semicolon and by adding at the end thereof the following new paragraph: "(21) to the extent provided in section 1022, relating to inci-ease '*"'*' ^' ^^' in basis for certain loreign personal holding company stock or securities." (3) CLERICAL AMENDMENT.—The table of sections for part II of subchapter O of chapter 1 is amended by striking out "Sec. 1022. Cross references." and inserting in lieu thereof the following: "Sec. 1022. Increase in basis with rpspect to certain foreign nersonal holding company stock or securities!. "Sec. 1023. Cross references." (k) TECHNICAL AMENDMENTS.—

(1) Section 542(b) (relating to corporations filing consolidated returns) is amended by striking out "gross income*' each place it appeal's and inserting in lieu thereof "adjusted ordinary gross income". (2) Section 543 (relating to personal holding company income) is amended by striking out subsection (d) (relating to special adjustment on disposition of antitrust stock received as a dividend). (3) Section 544 (relating to rules for determining stock ownership) is amended— (A) by striking out "section 5 4 3 (a)(5) " each place it appears and inserting in lieu thereof "section 543(a)(7)", and

26 USC 542.

je use 543.

26 USC 544.

^"'e, p. 83.

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