Page:United States Statutes at Large Volume 92 Part 3.djvu/258

 92 STAT. 2890

PUBLIC LAW 95-600—NOV. 6, 1978 "Sec. 126. Certain cost-sharing payments. "Sec. 127. Cross references to other Acts." (c) RECAPTURE OF GAIN FROM DISPOSITION OF PROPERTY.—

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(1) Part IV of subchapter P of chapter 1 (relating to special rules for determining capital gains and losses) is amended by adding at the end thereof the following: 26 USC 1255.

Ante, p. 2889.

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26 USC 1245.

26 USC 126 note.

"SEC. 1255. GAIN FROM DISPOSITION OF SECTION 126 PROPERTY. "(a) GENERAL RULE.— "(1) ORDINARY INCOME.—Except

as otherwise provided in this section, if section 126 property is disposed of, the lower of— "(A) the applicable percentage of the aggregate payinents, with respect to such property, excluded from gross income under section 126, or "(B) the excess of— "(i) the amount realized (in the case of a sale, exchange, or involuntary conversion), or the fair market value of such section 126 property (in the case of any other disposition), over "(ii) the adjusted basis of such property shall be treated as ordinary income. "(2) SECTION 126 PROPERTY.—For purposes of this section, 'section 126 property' means any property acquired, improved, or otherwise modified by the application of payments excluded from gross income under section 126. "(3) APPLICABLE PERCENTAGE,—For purposes of this section, if section 126 property is disposed of less than 10 years after the date of receipt of payments excluded from gross income under section 126, the applicable percentage is 100 percent. If section 126 property is disposed of more than 10 years after such date, the applicable percentage is 100 percent reduced (but not below zero) by 10 percent for each year or part thereof in excess of 10 years such property was held after the date of receipt of the payments. "(b) SPECIAL RULES.—Under regulations prescribed by the Secretary— "(1) rules similar to the rules applicable under section 1245 shall be applied for purposes of this section, and "(2) amounts treated as ordinary income under this section shall be treated in the same manner as amounts treated as ordinary income under section 1245." (2) The table of sections for such part is amended by adding at the end thereof the following new item: "Sec. 1255. Gain from disposition of section 126 property." (d) EFFECTIVE DATE.—The amendments made by this

section shall apply with respect to grants made under the programs after September 30, 1979.

Subtitle F—Studies SEC. 551. STUDY OF SIMPLIFICATION OF TAX RETURNS.

26 USC 6011 note.

(a) STUDY.—The Secretary of the Treasury shall conduct a full and complete study and investigation with respect to— (1) provisions of the Internal Revenue Code of 1954 which, due to their complexity, may hamper the ability of individuals to prepare accurate and complete Federal income tax returns, and

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