Page:United States Statutes at Large Volume 90 Part 2.djvu/407

 PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1875

" (5) APPRECIATED CARRYOVER BASIS PROPERTY.—For purposes of

this section, the term 'appreciated carryover basis property' means any carryover basis property if the fair market value of such property exceeds the adjusted basis of such property immediately before the death of the decedent. " (g) OTHER SPECIAL RULES AND DEFINITIONS. — " (1) F A I R MARKET VALUE.—For purposes of this section, when

not otherwise distinctly expressed, the term 'fair market value' means value as determined under chapter 11. " (2) PROPERTY PASSING FROM THE DECEDENT.—For purposes of

this section, property passing from the decedent shall be treated as property acquired from the decedent. "(3)

DECEDENT'S BASIS U N K NOW N. — I f the facts necessary to

determine the basis (unadjusted) of carryover basis property immediately before the death of the decedent are unknown to the person acquiring such property from the decedent, such basis shall be treated as being the fair market value of such property as of the date (or approximate date) at which such property was acquired by the decedent or by the last preceding owner in whose hands it did not have a basis determined in whole or in part by reference to its basis in the hands of a prior holder. "(4)

CERTAIN MORTGAGES.—For purposes of subsections

(c),

(d), and (e),if— " (A) there is an u n p a i d mortgage on, or indebtedness in respect of, property, " (B) such mortgage or indebtedness does not constitute a liability of the estate, and " (C) such property is included in the gross estate undiminished by such mortgage or indebtedness, then the fair market value of such property to be treated as included i n the §ross estate shall be the fair market value of such property, diminished by such mortgage or indebtedness. " (h) ADJUSTMENT TO BASIS FOR DECEMBER 31, 1976, F A I R M A R K E T VALUE.— " (1) MARKETABLE BONDS AND SECURITIES.—If the adjusted basis

immediately before the death of the decedent of any property which is carryover basis property reflects the adjusted basis of any marketable bond or security on December 31, 1976, and if the fair market value of such bond or security on December 31, 1976, exceeded its adjusted basis on such date, then, for purposes of determining gain, the adjusted basis of such property shall be increased by the amount of such excess. " (2) PROPERTY OTHER THAN MARKETABLE BONDS AND SECURITIES.— " (A) IN GENERAL. I f

" (i) the adjusted basis immediately before the death of the decedent of any property which is carryover basis property reflects the adjusted basis on December 3 1, 1976, of any property other than a marketable bond or security, and " ( i i) the value of such carryover basis property (as determined with respect to the estate of the decedent without regard to section 2032) exceeds the adjusted 26 USC 2032. basis of such property immediately before the death of the decedent (determined without regard to this subsection), then, for purposes of determining gain, the adjusted basis of such property immediately before the death of the decedent

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