Page:United States Statutes at Large Volume 95.djvu/235

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 209

"(i) the property was owned or used at any time during 1980 by the taxpayer or a related person, "(ii) the property is acquired from a person who owned such property at any time during 1980, and, as part of the transaction, the user of such property does not change, "(iii) the taxpayer leases such property to a person (or a person related to such person) who owned or used such property at any time during 1980, or "(iv) the property is acquired in a transaction as part of which the user of such property does not change and the property is not recovery property in the hands of the person from which the property is so acquired by reason of clause (ii) or (iii). For purposes of this subparagraph and subparagraph (B), property shall not be treated as owned before it is placed in service. For purposes of this subparagraph, whether the user of property changes as part of a transaction shall be determined in accordance with regulations prescribed by the Secretary. "(B) SECTION 1250 CLASS PROPERTY.—The term 'recovery 26 USC 1250. property' does not include section 1250 class property acquired by the tsixpayer after December 31, 1980, if— "(i) such property was owned by the taxpayer or by a related person at any time during 1980; "(ii) the taxpayer leases such property to a person (or a person related to such person) who owned such property at any time during 1980; or described in section 1031, 1033, 1038, or 1039 to the extent that the basis of such property includes an amount representing the adjusted basis of other property owned by the taxpayer or a related person during 1980. "(C) CERTAIN NONRECOGNITION TRANSACTIONS.—The term 'recovery property' does not include property placed in service by the transferor or distributor before January 1, 1981, which is acquired by the taxpayer after December 31, 1980, in a transaction described in section 332, 351, 361, 371(a), 374(a), 721, or 731 (or such property acquired from the transferee or acquiring corporation in a transaction described in such section), to the extent that the basis of the property is determined by reference to the basis of the property in the hands of the transferor or distributor. In the case of property to which this subparagraph applies, rules similar to the rules described in section 381(c)(6) shall apply. "(D)
 * (iii) such property is acquired in an exchange

RELATED PERSON DEFINED.—Except as provided in

subparagraph (E), for purposes of this paragraph a person (hereinafter referred to as the related person) is related to any person if— "(i) the related person bears a relationship to such person specified in section 267(b) or section 707(b)(l), or "(ii) the related person and such person are engaged in trades or businesses under common control (within the meaning of subsections (a) and (b) of section 52). For purposes of clause (i), in applying section 267(b) and section 70703X1) '10 percent' shall be substituted for '50 percent'. The determination of whether a person is related to

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