Page:United States Statutes at Large Volume 90 Part 2.djvu/405

 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1873

or passed from a decedent (within the meaning of section 1014(b)) and which is not excluded pursuant to paragraph (2) 26 USC 1014. or (3). (2) CERTAIN PROPERTY NOT CARRYOVER BASIS PROPERTY.—The

teraa 'carryover basis property ' does not include— " (A) any item of gross income i n respect of a decedent described in section 691; " (B) property described in section 2042 (relating to proceeds of life insurance); " (C) a joint and survivor annuity under which the surviving annuitant is taxable under section 72, and payments and distributions under a deferred compensation plan described in part I of subchapter D of chapter 1 to the extent such payments and distributions a r e taxable to the decedent's beneficiary under chapter 1; " (D) property included in the decedent's gross estate by reason of section 2035, 2038, or 2041 which has been disposed of before the decedent's death in a transaction in which gain or loss is recognizable for purposes of chapter 1; " (E) stock or a stock option passing from the decedent to the extent income in respect of such stock or stock option is includable in gross income under section 422(c)(1), 423(c), or 4 2 4 (c)(1); and " (F) property described in section 1014(b)(5). "(3)

$10,000 EXCLUSION FOR CERTAIN ASSETS.—

" (A) EXCLUSION.—The term 'carryover basis property' does not include any asset— " (i) which, in the hands of the decedent, was a personal o r household effect, and " ( i i) with respect to which the executor has made an election under this paragraph. " (B) LIMITATION.—The fair market value of all assets designated under this subsection with respect to any decedent shall not exceed $10,000. " (C) ELECTION.—An election under this paragraph with respect to any asset shall be made by the executor not later than the date prescribed by section 6075(a) for filing the return of the tax imposed by section 2001 or 2101 (including Ante, pp. 1846, extensions thereof), and shall be made in such manner as 1^50. the Secretary shall by regulations prescribe. "(c)

INCREASE I N BASIS FOR FEDERAL AND STATE ESTATE TAXES

ATTRIBUTABLE TO APPRECIATION.—The basis of appreciated carryover basis property (determined after any adjustment under subsection (h)) which is subject to the tax imposed by section 2001 or 2101 in the hands of the person acquiring it from the decedent shall be increased by a n amount which bears the same ratio to the Federal and State estate taxes as— " (1) the n e t appreciation in value of such property, bears to " (2) the fair market value of all property which is subject to the tax imposed by section 2001 or 2101. " (d) $60,000 MINIMUM FOR BASES OF CARRYOVER BASIS PROPERTIES.—

" (1) IN GENERAL.—If $60,000 exceeds the aggregate bases (as determined after any adjustment under subsection (h) or (c)) of all carryover basis property, the basis of each appreciated carryover basis property (after any adjustment under subsection (h) or (c)) shall be increased by an amount which bears the same ratio to the amount of such excess as—

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