Taxable Years (b) (5) (including, also, cases where part of the consideration for the transfer of such property to the corporation was property or money, in addition to such stock or securities), or (B) as paid-in surplus or as a contribution to capital, then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain or decreased in the amount of loss recognized to the transferor upon such transfer under the law applicable to the year in which the transfer was made. (b) (5) (including, also, cases (b) (5) (including, also, cases (B) as paid-in surplus or as a then the basis shall be the same as (B) as paid-in surplus or as a contribution to capital, then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain or decreased in the amount of loss recognized to the transferor upon such transfer under the law applicable to the year in which the transfer was made. Sec. 113. (a) (9) Involuntary Sec. 113. (a) (9) Involuntary conversion. If the property was conversion.-If the property was acquired, after February 28, 1913, acquired, after February 28, 1913, as the result of a compulsory or in- as the result of a compulsory or involuntary conversion described in voluntary conversion described in section 112 (f), the basis shall be section 112 (f), the basis shall be the same as in the case of the prop- the same as in the case of the property so converted, decreased in the erty so converted, decreased in the amount of any money received by amount of any money received by the taxpayer which was not ex- the taxpayer which was not expended in accordance with the pro- pended in accordance with the provisions of law (applicable to the visions of law (applicable to the year in which such conversion was year in which such conversion was determining the taxable made) determining the status of the gain or loss upon such status of the gain or loss upon such conversion, and increased in the conversion, and increased in the amount of gain or decreased in the amount of gain or decreased in the amount of loss to the taxpayer rec- amount of loss to the taxpayer recognized upon such conversion under ognized upon such conversion under the law applicable to the year in the law applicable to the year in which such conversion was made. which such conversion was made. erty so converted, decreased in the in taxable Sec. 113. (a) (10) Wash sales of Sec. 113. (a) (10) Wash sales of Sec. 113. (a) (10) Wash sales of stock. If the property consists of stock.-If the property consists of stock. If the property consists of stock or securities the acquisition stock or securities the acquisition stock or securities the acquisition of which (or the contract or option of which (or the contract or option of which (or the contract or option to acquire which) resulted in the to acquire which) resulted in the to acquire which) resulted in the nondeductibility (under section 118 nondeductibility (under section 118 nondeductibility (under section 118 of this chapter or corresponding of this chapter or corresponding of this chapter or corresponding provisions of prior income tax provisions of prior income tax provisions of prior income tax laws, relating to wash sales) of the laws, relating to wash sales) of the laws, relating to wash sales) of the loss from the sale or other disposi- loss from the sale or other disposi-loss from the sale or other disposition of substantially identical stock tion of substantially identical stock tion of substantially identical stock or securities, then the basis shall be or securities, then the basis shall be or securities, then the basis shall be the basis of the stock or securities the basis of the stock or securities the basis of the stock or securities so sold or disposed of, increased or so sold or disposed of, increased or so sold or disposed of, increased or decreased, as the case may be, by decreased, as the case may be, by decreased, as the case may be, by the difference, if any, between the the difference, if any, between the the difference, if any, between the price at which the property was ac- price at which the property was ac- price at which the property was acquired and the price at which such quired and the price at which such quired and the price at which such substantially identical stock or se- substantially identical stock or se- substantially identical stock or securities were sold or otherwise dis- curities were sold or otherwise dis-curities were sold or otherwise disposed of. posed of. posed of. Sec. 113. (a) (11) Property ac- Sec. 113. (a) (11) Property ac- Sec. 113. (a) (11) Property acquired during affiliation.-In the quired during affiliation.-In the quired during affiliation.-In the case of property acquired by a cor-case of property acquired by a cor- | case of property acquired by a cor Taxable Years (b) (5) (including, also, cases where part of the consideration for the transfer of such property to the corporation was property or money, in addition to such stock or securities), or (B) as paid-in surplus or as a contribution to capital, then the basis shall be the same as it would be in the hands of the transferor, increased in the amount of gain or decreased in the amount of loss recognized to the transferor upon such transfer under the law applicable to the year in which the transfer was made. (b) (5) Taxable Years (including, also, cases where part of the consideration for the transfer of such property to the corporation was property or money, in addition to such stock or securities), or (B) as paid-in surplus or as a then the basis shall be the same as Sec. 113. (a) (9) Involuntary Sec. 113. (a) (9) Involuntary conversion. If the property was conversion. If the property was acquired, after February 28, 1913, acquired, after February 28, 1913, as the result of a compulsory or in- as the result of a compulsory or involuntary conversion described in voluntary conversion described in section 112 (f), the basis shall be section 112 (f), the basis shall be the same as in the case of the prop- the same as in the case of the property so converted, decreased in the erty so converted, decreased in the amount of any money received by amount of any money received by the taxpayer which was not ex- the taxpayer which was not expended in accordance with the pro- pended in accordance with the provisions of law (applicable to the visions of law (applicable to the year in which such conversion was year in which such conversion was made) determining the taxable made) determining the taxable status of the gain or loss upon such conversion, and increased in the amount of gain or decreased in the amount of loss to the taxpayer recognized upon such conversion under the law applicable to the year in which such conversion was made. status of the gain or loss upon such Taxable Years Sec. 113. (a) (9) Involuntary conversion. See p. 162, Eighth Edition. Sec. 113. (a) (10) Wash sales of Sec. 113. (a) (10) Wash sales of Sec. 113. (a) (10) Wash sales of stock. If the property consists of stock.-If the property consists of stock. stock or securities the acquisition stock or securities the acquisition of which (or the contract or option of which (or the contract or option to acquire which) resulted in the to acquire which) resulted in the nondeductibility (under section 118 nondeductibility (under section 118 of this chapter or corresponding of this chapter or corresponding provisions of prior income tax provisions of prior income tax laws, relating to wash sales) of the laws, relating to wash sales) of the loss from the sale or other disposi- loss from the sale or other disposition of substantially identical stock tion of substantially identical stock or securities, then the basis shall be or securities, then the basis shall be the basis of the stock or securities the basis of the stock or securities so sold or disposed of, increased or so sold or disposed of, increased or decreased, as the case may be, by decreased, as the case may be, by the difference, if any, between the price at which the property was acquired and the price at which such substantially identical stock or securities were sold or otherwise disposed of. the difference, if any, between the Sec. 113. (a) (11) Property ac- Sec. 113. (a) (11) Property acquired during affiliation. In the quired during affiliation. In the case of property acquired by a cor- case of property acquired by a cor See p. 164, Eighth Edition. Sec. 113. (a) (11) Property acquired during affiliation. See p. 164, Eighth Edition. Taxable Years Taxable Years Taxable Years poration, during a period of affilia-poration, during a period of affilia-poration, during a period of affiliation, from a corporation with which tion, from a corporation with which tion, from a corporation with which it was affiliated, the basis of such it was affiliated, the basis of such it was affiliated, the basis of such property, after such period of affili- property, after such period of affili- property, after such period of affiliation, shall be determined, in ac- ation, shall be determined, in ac- ation, shall be determined, in accordance with regulations prescribed cordance with regulations prescribed cordance with regulations prescribed by the Commissioner with the ap- by the Commissioner with the ap- by the Commissioner with the approval of the Secretary, without proval of the Secretary, without proval of the Secretary, without regard to inter-company transac- regard to inter-company transac- regard to inter-company transac-* tions in respect of which gain or tions in respect of which gain or tions in respect of which gain or loss was not recognized. For the loss was not recognized. For the loss was not recognized. For the purposes of this paragraph, the purposes of this paragraph, the purposes of this paragraph, the term "period of affiliation" means term "period of affiliation" means term "period of affiliation" means the period during which such cor- the period during which such cor- the period during which such corporations were affiliated (deter-porations were affiliated (deter- porations were affiliated (determined in accordance with the law mined in accordance with the law mined in accordance with the law applicable thereto) but does not applicable thereto) but does not applicable thereto) but does not include any taxable year beginning on or after January 1, 1922, unless a consolidated return was made, nor any taxable year after the taxable year 1928. include any taxable year beginning include any taxable year beginning on or after January 1, 1922, unless on or after January 1, 1922, unless a consolidated return was made, nor a consolidated return was made, nor any taxable year after the taxable any taxable year after the taxable The basis in case of year 1928. The basis in case of year 1928. The basis in case of property acquired by a corpora- property acquired by a corpora- property acquired by a corporation during any period, in the tax- tion during any period, in the tax- tion during any period, in the taxable year 1929 or any subsequent able year 1929 or any subsequent able year 1929 or any subsequent taxable year, in respect of which a taxable year, in respect of which a taxable year, in respect of which a consolidated return is made by consolidated return is made by consolidated return is made by such corporation under section 141 such corporation under section 141 such corporation under section 141 of this chapter or the Revenue Act of this chapter or the Revenue Act of this chapter or the Revenue Act of 1928, 45 Stat. 831, or the Rev- of 1928, 45 Stat. 831, or the Rev- of 1928, 45 Stat. 831, or the Revenue Act of 1932, 47 Stat. 213, or enue Act of 1932, 47 Stat. 213, or enue Act of 1932, 47 Stat. 213, or the Revenue Act of 1934, 48 Stat. the Revenue Act of 1934, 48 Stat. the Revenue Act of 1934, 48 Stat. 720, or the Revenue Act of 1936 720, or the Revenue Act of 1936 720, or the Revenue Act of 1936 49 Stat. 1698, or the Revenue Act 49 Stat. 1698, or the Revenue Act 49 Stat. 1698, or the Revenue Act of 1938, 52 Stat. 508, shall be de- of 1938, 52 Stat. 508, shall be de- of 1938, 52 Stat. 508, shall be determined in accordance with regutermined in accordance with regu-termined in accordance with regulations prescribed under section lations prescribed under section lations prescribed under section 141 (b) of this chapter or the Rev- 141 (b) of this chapter or the Rev-141 (b) of this chapter or the Revenue Act of 1928 or the Revenue enue Act of 1928 or the Revenue enue Act of 1928 or the Revenue Act of 1932 or the Revenue Act of Act of 1932 or the Revenue Act of Act of 1932 or the Revenue Act of 1934 or the Revenue Act of 1936 1934 or the Revenue Act of 1936 1934 or the Revenue Act of 1936 the Revenue Act of 1938. or the Revenue Act of 1938. or the Revenue Act of 1938. or The basis in the case of property The basis in the case of property The basis in the case of property held by a corporation during any held by a corporation during any held by a corporation during any period, in the taxable year 1929 period, in the taxable year 1929 period, in the taxable year 1929 or any subsequent taxable year, in or any subsequent taxable year, in or any subsequent taxable year, in respect of which a consolidated re- respect of which a consolidated rerespect of which a consolidated return is made by such corporation turn is made by such corporation turn is made by such corporation under section 141 of this chapter under section 141 of this chapter under section 141 of this chapter or the Revenue Act of 1928 or the or the Revenue Act of 1928 or the or the Revenue Act of 1928 or the Revenue Act of 1932 or the Rev- Revenue Act of 1932 or the Rev- Revenue Act of 1932 or the Revenue Act of 1934 or the Revenue enue Act of 1934 or the Revenue enue Act of 1934 or the Revenue Act of 1936, or the Revenue Act Act of 1936, or the Revenue Act Act of 1936, or the Revenue Act of 1938, shall be adjusted in re- of 1938, shall be adjusted in reof 1938, shall be adjusted in respect of any items relating to such spect of any items relating to such spect of any items relating to such period, in accordance with regula-period, in accordance with regula-period, in accordance with regulations prescribed under section 141 tions prescribed under section 141 (b) of this chapter or the Revenue Act of 1928 or the Revenue Act of 1932 or the Revenue Act of 1934 or the Revenue Act of 1936, or the Revenue Act of 1938, applicable to such period. tions prescribed under section 141 (b) of this chapter or the Revenue Act of 1928 or the Revenue Act of 1932 or the Revenue Act of 1934 or the Revenue Act of 1936, or the Revenue Act of 1938, applicable to such period. Sec. 113 (a) (11), I. R. C., supra, amended by Sec. 1, H. J. Res. 60, approved March Sec. 113 (a) (11), I. R. C., supra, amended by Sec. 1, H. J. Res. 60, approved March (b) of this chapter or the Revenue Act of 1928 or the Revenue Act of 1932 or the Revenue Act of 1934 or the Revenue Act of 1936, or the Revenue Act of 1938, applicable to such period. Sec. 113 (a) (11), I. R. supra, amended by Sec. 1, H. J. Res. 60, approved March poration, during a period of affilia-poration, during a period of affilia- Taxable Years Beginning before 1939 Sec. 113. (a) (12) Basis estab- Sec. 113. (a) (12) Basis estab- Sec. 113. (a) (12) Basis established by Revenue Act of 1932.- lished by Revenue Act of 1932.— lished by Revenue Act of 1932.If the property was acquired, after If the property was acquired, after If the property was acquired, after February 28, 1913, in any taxable February 28, 1913, in any taxable February 28, 1913, in any taxable year beginning prior to January 1, year beginning prior to January 1, year beginning prior to January 1, 1934, and the basis thereof, for 1934, and the basis thereof, for 1934, and the basis thereof, for the purposes of the Revenue Act the purposes of the Revenue Act the purposes of the Revenue Act of 1932, 47 Stat. 199, was pre- of 1932, 47 Stat. 199, was pre- of 1932, 47 Stat. 199, was prescribed by section 113 (a) (6), (7), scribed by section 113 (a) (6), (7), scribed by section 113 (a) (6), (7), or (9) of such Act, then for the or (9) of such Act, then for the or (9) of such Act, then for the purposes of this chapter the basis purposes of this chapter the basis purposes of this chapter the basis shall be the same as the basis shall be the same as the basis shall be the same as the basis therein prescribed in the Revenue therein prescribed in the Revenue therein prescribed in the Revenue Act of 1932. Act of 1932. Act of 1932. Sec. 113. (a) (13) Partnerships. Sec. 113. (a) (13) Partnerships. Sec. 113. (a) (13) Partnerships. -If the property was acquired, If the property was acquired, If the property was acquired, after February 28, 1913, by a part- after February 28, 1913, by a part-after February 28, 1913, by a partnership and the basis is not other- nership and the basis is not other- nership and the basis is not otherwise determined under any other wise determined under any other wise determined under any other paragraph of this subsection, then paragraph of this subsection, then paragraph of this subsection, then the basis shall be the same as it the basis shall be the same as it the basis shall be the same as it would be in the hands of the trans- would be in the hands of the trans- would be in the hands of the transferor, increased in the amount of feror, increased in the amount of feror, increased in the amount of gain or decreased in the amount gain or decreased in the amount gain or decreased in the amount of loss recognized to the transferor of loss recognized to the transferor of loss recognized to the transferor upon such transfer under the law upon such transfer under the law upon such transfer under the law applicable to the year in which the applicable to the year in which the applicable to the year in which the transfer was made. If the prop-transfer was made. If the prop-transfer was made. erty was distributed in kind by a erty was distributed in kind by a erty was distributed in kind by a partnership to any partner, the partnership to any partner, the partnership to any partner, the basis of such property in the hands basis of such property in the hands of the partner shall be such part of the partner shall be such part of the basis in his hands of his of the basis in his hands of his partnership interest as is properly partnership interest as is properly allocable to such property. allocable to such property. If the prop basis of such property in the hands of the partner shall be such part of the basis in his hands of his partnership interest as is properly allocable to such property. Sec. 113. (a) (14) Property ac- Sec. 113. (a) (14) Property ac- Sec. 113. (a) (14) Property acquired before March 1, 1913. In quired before March 1, 1913. In quired before March 1, 1913.-In the case of property acquired be- the case of property acquired be- the case of property acquired before March 1, 1913, if the basis fore March 1, 1913, if the basis fore March 1, 1913, if the basis otherwise determined under this otherwise determined under this otherwise determined under this subsection, adjusted (for the pe- subsection, adjusted (for the pe- subsection, adjusted (for the period prior to March 1, 1913) as riod prior to March 1, 1913) as riod prior to March 1, 1913) as provided in subsection (b), is less provided in subsection (b), is less provided in subsection (b), is less than the fair market value of the than the fair market value of the than the fair market value of the property as of March 1, 1913, then property as of March 1, 1913, then property as of March 1, 1913, then the basis for determining gain the basis for determining gain the basis for determining gain shall be such fair market value. shall be such fair market value. shall be such fair market value. In determining the fair market In determining the fair market In determining the fair market value of stock in a corporation as value of stock in a corporation as value of stock in a corporation as of March 1, 1913, due regard of March 1, 1913, due regard of March 1, 1913, due regard shall be given to the fair market shall be given to the fair market shall be given to the fair market value of the assets of the corpora- value of the assets of the corpora- value of the assets of the corporation as of that date. tion as of that date. tion as of that date. |