Page:United States Statutes at Large Volume 78.djvu/144

 102

ae'uscr^s?^^*

PUBLIC LAW 88-272-FEB. 26, 1964

[78 STAT.

to an organization (other than a cooperative described in section ^^^^ which is exempt from the tax imposed by this chapter. " (4) L I K E KIND EXCHANGES; INVOLUNTARY CONVERSIONS, ETC.— " (A) RECOGNITION LIMIT.—If property is disposed of

10^3^"^^ '°^^'

and gain (determined without regard to this section) is not recognized in whole or in part under section 1031 or 1033, then the amount of gain taken into account by the transferor under subsection (a)(1) shall not exceed the greater of the following: " (i) the amount of gain recognized on the disposition (determined without regard to this section), increased as provided in subparagraph (B), or (ii) the amount determined under subparagraph ,(C). " (B) INCREASE FOR CERTAIN STOCK.—^W'^ith respect to any transaction, the increase provided by this subparagraph is the amount equal to the fair market value of any stock purchased in a corporation which (but for this paragraph) would result in nonrecognition of gain under section 1033 (a)(3)(A). " (C) ADJUSTMENT WHERE INSUFFICIENT SECTION 1250 PROPERTY IS ACQUIRED.—With respect to any transaction, the

amount determined under this subparagraph shall be the excess of— "(i) the amount of gain which would (but for this paragraph) be taken into account under subsection (a) (1), over "(ii) the fair market vahie (or cost in the case of a transaction described in section 1033(a)(3)) of the section 1250 property acquired in the transaction. " (I)) BASIS OF PROPERTY ACQUIRED.—In the case of property purchased by the taxpayer in a transaction described n\ section 1033(a)(3), in applying the hist sentence of section 1033 (c), such sentence shall be applied— " (i) first solely to section 1250 properties and to the amount of gain not taken into account under subsection (a) (1^ by reason of this paragraph, and "(ii) then to all purchased properties to which such sentence applies and to the remaining gain not recognized on the transaction as if the cost of the section 1250 properties were the basis of such properties computed under clause (i). In the case of property acquired in any other transaction to which this paragraph applies, rules consistent with the pre(eding sentence shall be applied under regulations prescribed by the Secretary or his delegate. " (E) ADDITIONAL DEPRECIATION WITH RESPECT TO PROPERTY

Ante. p. 101.

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DISPOSED OF.—In the case of any transaction described in section 1031 or 1033, the additional depreciation in respect Qf f^Q section 1250 property acquired which is attributable to the section 1250 property disposed of shall be an amount equal to the amount of the gain which was not taken into account under subsection (a)(1) by reason of the application of this paragraph. " ( ^) SECTION 1071 AND losi TRANSACTIONS.—Under regulations prescribed by the Secretary or his delegate, rules consistent with paragraphs (3) and (4) of this subsection and with subsections (e) and (f) shall apply in the case of transactions described in section 1071 (relating to o-nin from sale or exchange to effectuate

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