Page:United States Statutes at Large Volume 95.djvu/236

 95 STAT. 210

26 USC 334.

PUBLIC LAW 97-34—AUG. 13, 1981 another person shall be made as of the time the taxpayer acquires the property involved. (E) LIQUIDATION OF SUBSIDIARY, ETC.—For purposes of this paragraph, a corporation is not a related person to the taxpayer— "(i) if such corporation is a distributing corporation in a transaction to which section 334(b)(2)(B) applies and the stock of such corporation referred to in such subparagraph (B) was acquired by the taxpayer by purchase after December 31, 1980, or "(ii) if such corporation is liquidated in a liquidation to which section 331(a) applies and the taxpayer (or a related person) by himself or together with 1 or more other persons acquires the stock of the liquidated corporation by purchase (meeting the requirements of section 334(b)(2)(B)) after December 31, 1980. "(F) ANTIAVOIDANCE RULE.—The term 'recovery property' does not include property acquired by the taxpayer after December 31, 1980, which, under regulations prescribed by the Secretary, is acquired in a transaction one of the principal purposes of which is to avoid the principles of paragraph (1) and this paragraph. "(G) REDUCTION IN UNADJUSTED BASIS.—In the case of an acquisition of property described in subparagraph (B) or (C), the unadjusted basis of the property under subsection (d) shall be reduced to the extent that such property acquired is not recovery property. "(H)

SPECIAL RULES FOR PROPERTY PLACED IN SERVICE BEFORE CERTAIN PERCENTAGES TAKE EFFECT.—Under regula-

tions prescribad by the Secretary— "(i) rules similar to the rules of this paragraph shall be applied in determining whether the tables contained in subparagraph (B) or (C) of subsection (b)(1) apply with respect to recovery property, and (ii) if the tables contained in subparagraph (B) or (C) of subsection (b)(1) do not apply to such property by reason of clause (i), the deduction allowable under subsection (a) shall be computed— "(I) In the case of a transaction described in subparagraph (C), under rules similar to the rules described in section 381(c)(6); and "(II) in the case of a transaction otherwise described in this paragraph, under the recovery period and method (including rates prescribed under subsection (b)(1)) used by the person from whom the taxpayer acquired such property (or, where such person had no recovery method and period for such property, under the recovery period and method (including rates prescribed under subsection (b)(1)) used by the person which transferred such property to such person). "(f) SPECIAL RULES FOR APPLICATION OF THIS SECTION.—For purposes of this section— "(1) COMPONENTS OF SECTION 1250 CLASS PROPERTY.—

"(A) IN GENERAL.—Except as otherwise provided in this paragraph— "(i) the deduction allowable under subsection (a) with respect to any component (which is section 1250 class

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