Page:United States Statutes at Large Volume 98 Part 1.djvu/993

 PUBLIC LAW 98-369—JULY 18, 1984 "(i) any recognized gain on the sale or exchange of property used in the trade or business, and "(ii) any recognized gain from the compulsory or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or }• imminence thereof) into other property or money of— '"(I) property used in the trade or business, or "(II) any capital asset which is held for more than 1 year and is held in connection with a trade or business or a transaction entered into for profit. H "(B) SECTION 1231 LOSS.—The term 'section 1231 loss' means any recognized loss from a sale or exchange or conversion described in subparagraph (A). "(4) SPECIAL RULES.—For purposes of this subsection— "(A) In determining under this subsection whether gains exceed losses— ^^" "(i) the section 1231 gains shall be included only if and to the extent taken into account in computing ri;: gross income, and "(ii) the section 1231 losses shall be included only if and to the extent taken into account in computing taxable income, except that section 1211 shall not apply. "(B) Losses (including losses not compensated for by ' insurance or otherwise) on the destruction, in whole or in part, theft or seizure, or requisition or condemnation of— "(i) property used in the trade or business, or js c*a'<(jj) capital assets which are held for more than 1 year and are held in connection with a trade or business or a transaction entered into for profit, • shall be treated as losses from a compulsory or involuntary conversion. "(C) In the case of any involuntary conversion (subject to the provisions of this subsection but for this sentence) arising from fire, storm, shipwreck, or other casualty, or from theft, of any— "(i) property used in the trade or business, or "(ii) any capital asset which is held for more than 1 ' year and is held in connection with a trade or business or a transaction entered into for profit, this subsection shall not apply to such conversion (whether resulting in gain or loss) if during the taxable year the recognized losses from such conversions exceed the recognized gains from such conversions." (iv) Sections 873(b)(l) and 931(d)(2)(B) are each amended by striking out ", for losses of property not connected with the trade or business if arising from certain casualties or theft," and inserting in lieu thereof "for losses". (v) EFFECTIVE DATE.—The amendments made by this subparagraph shall apply to taxable years beginning after December 31, 1983. (B) TRANSITIONAL RULE.—In the case of taxable years beginning before January 1, 1984— (i) For purposes of paragraph dXB) of section 165(h) of the Internal Revenue Code of 1954, adjusted gross

31-194 0 - 86 - 32: QL. 3 Part 1

98 STAT. 945

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26 USC 873,931.

26 USC 165 note. 26 USC 165 note. Ante, p. 943.

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