Page:United States Statutes at Large Volume 98 Part 1.djvu/992

 98 STAT. 944

PUBLIC LAW 98-369—JULY 18, 1984 "(3) DEFINITIONS OF PERSONAL CASUALTY GAIN AND PERSONAL

CASUALTY LOSS.—For purposes of this subsection— "(A) PERSONAL CASUALTY GAIN.—The term 'personal casualty gain' means the recognized gain from any involuntary conversion of property which is described in subsection (c)(3) arising from fire, storm, shipwreck, or other casualty, or from theft. "(B) PERSONAL CASUALTY LOSS.—The term 'personal casualty loss' means any loss described in subsection (c)(3). For purposes of paragraph (2), the amount of any personal casualty loss shall be determined after the application of paragraph (1). "(4) SPECIAL RULES.— "(A) PERSONAL CASUALTY LOSSES ALLOWABLE I N COMPUTING ADJUSTED GROSS INCOME TO THE EXTENT OF PERSONAL CASUALTY GAINS.—In any case to which paragraph (2)(A)

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applies, the deduction for personal casualty losses for any taxable year shall be treated as a deduction allowable in computing adjusted gross income to the extent such losses do not exceed the personal casualty gains for the taxable year. "(B) JOINT RETURNS.—For purposes of this subsection, a husband and wife making a joint return for the taxable year shall be treated as 1 individual. "(C) DETERMINATION OF ADJUSTED GROSS INCOME IN CASE

OF ESTATES AND TRUSTS.—For purposes of paragraph (2), the

adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual, except that the deductions for costs paid or incurred in connection with the administration of the estate or trust shall be treated as allowable in arriving at adjusted gross income. "(D) COORDINATION WITH ESTATE TAX.—No loss described in subsection (c)(3) shall be allowed if, at the time of filing the return, such loss has been claimed for estate tax purposes in the estate tax return." (iii) SECTION 1 2 3 1 NOT TO APPLY TO PERSONAL CASU-

26 USC 1231.

ALTY GAINS OR LOSSES.—Subsection (a) of section 1231 (relating to property used in the trade or business and involuntary conversions) is amended to read as follows: "(a) GENERAL RULE.— "(1) GAINS EXCEED LOSSES.—If—

"(A) the section 1231 gains for any taxable year, exceed "(B) the section 1231 losses for such taxable year, such gains and losses shall be treated as long-term capital gains or long-term capital losses, as the case may be. "(2) GAINS DO NOT EXCEED LOSSES.—If—

"(A) the section 1231 gains for any taxable year, do not exceed "(B) the section 1231 losses for such taxable year, such gains and losses shall not be treated as gains and losses from sales or exchanges of capital assets. "(3) SECTION 1231 GAINS AND LOSSES.—For purposes of this subsection— "(A) SECTION 1231 GAIN.—The term 'section 1231 gain' means—

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