Page:United States Statutes at Large Volume 78.djvu/139

 78 STAT. ]

PUBLIC LAW 88-272-FEB. 26, 1964

first taxable year beginning after December 31, 1963) of each property included in such a g ^ e g a t i o n shall be the adjusted basis of such property at the time it was first included in the aggregation by the taxpayer, adjusted for that portion of those adjustments to the basis of the aggregation which are i"easonably attributable to such property. If, under the preceding sentence, the total of the adjusted bases of the interests included in the aggregation exceeds the adjusted basis of the aggregation (^as of the day preceding the first day of the first taxable year which begins after Deceml^r 31, 1963), the adjusted bases of the properties which include such interests shall be adjusted, under regulations prescribed by the Secretary of the Treasury or his delegate, so that the total of the adjusted bases of such interests equals the adjusted basis of the aggregation. An election under this paragraph shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe. (3) DEFINITIONS.—For purposes of this subsection— (A) SECTION 614(b) AGGREGATION,—The term "section 614(b) aggregation" means any aggregation to which section 614(b)(1)(A) of the Internal Revenue Code of 1954 (as in effect before the amendments made b j subsection (a) of this section) applied for the day preceding the first day of the first taxable year beginning after December 31, 1963. (B) PROPERTY.—The term "property" has the same meaning as is applicable, under section 614 of the Internal Revenue Code of 1954, to the taxpayer for the first taxable year beginning after December 31, 1963. (d) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply to taxable years beginning after December 31, 1963. SEC. 227. TREATMENT OF CERTAIN IRON ORE ROYALTIES. (a)

IN GENERAL.— (1) AMENDMENT

OF SECTION (5.SI (C).—Section 631(c) (relating to disposal of coal with a retained economic interest) is amended— (A) by striking out the heading and inserting in lieu thereof the following:

97

^^^ul*c*6iV°"

26 USC eai.

"(c) DISPOSAL OF COAL OR DOMESTIC IRON ORE W I T H A RETAINED ECONOMIC INTEREST.—";

(B) by inserting "or iron ore mined in the United States," after "coal (including lignite),"; (C) by inserting "or iron ore" after "coal" each other place it appeal's in section 631(c); and (D) by adding at the end thereof the following new sentence: "This subsection shall not apply to any disposal of iron ore— "(1) to a person whose relationship to the person disposing of such iron ore would result in the disallowance of losses under section 267 or 707 (b), or "(2) to a person owned or controlled directly or indirectly by the same interests which own or control the person disposing of such iron ore." (2) AMENDMENT OF SPXTION.12.M (b).—Section 1231(b)(2) (defining property used in the trade or business) is amended to read as follows: "(2) TIMBER, COAL, OR DOMESTIC IRON ORE.—Such term includes timber, coal, and iron ore with respect to which section 631 applies."

^e use 267,707.

26 USC 1231.

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