Subchapter P—Capital Gains and Losses
Amendments
1986—
1984—
PART I—TREATMENT OF CAPITAL GAINS
Amendments
2017—
2000—
1993—
1986—
1978—
[§1201. Repealed. Pub. L. 115–97, title I, §13001(b)(2)(A), Dec. 22, 2017, 131 Stat. 2096 ]
Section, Aug. 16, 1954, ch. 736,
Subsection (b) of this Section Prior to Repeal
Prior to repeal by section 13001(b)(2)(A) of
(b) Special rate for qualified timber gains
(1) In general
If, for any taxable year beginning in 2016, a corporation has both a net capital gain and qualified timber gain—
(A) subsection (a) shall apply to such corporation for the taxable year without regard to whether the applicable tax rate exceeds 35 percent, and
(B) the tax computed under subsection (a)(2) shall be equal to the sum of—
(i) 23.8 percent of the least of—
(I) qualified timber gain,
(II) net capital gain, or
(III) taxable income, plus
(ii) 35 percent of the excess (if any) of taxable income over the sum of the amounts for which a tax was determined under subsection (a)(1) and clause (i).
(2) Qualified timber gain
For purposes of this section, the term "qualified timber gain" means, with respect to any taxpayer for any taxable year, the excess (if any) of—
(A) the sum of the taxpayer's gains described in subsections (a) and (b) of section 631 for such year, over
(B) the sum of the taxpayer's losses described in such subsections for such year.
For purposes of subparagraphs (A) and (B), only timber held more than 15 years shall be taken into account.
See Extension of Special Rule Relating to Qualified Timber Gain note set out below.
Effective Date of Repeal
Repeal applicable to taxable years beginning after Dec. 31, 2017, see section 13001(c)(1) of
Extension of Special Rule Relating to Qualified Timber Gain
§1202. Partial exclusion for gain from certain small business stock
(a) Exclusion
(1) In general
In the case of a taxpayer other than a corporation, gross income shall not include 50 percent of any gain from the sale or exchange of qualified small business stock held for more than 5 years.
(2) Empowerment zone businesses
(A) In general
In the case of qualified small business stock acquired after the date of the enactment of this paragraph in a corporation which is a qualified business entity (as defined in section 1397C(b)) during substantially all of the taxpayer's holding period for such stock, paragraph (1) shall be applied by substituting "60 percent" for "50 percent".
(B) Certain rules to apply
Rules similar to the rules of paragraphs (5) and (7) of section 1400B(b) (as in effect before its repeal) shall apply for purposes of this paragraph.
(C) Gain after 2018 not qualified
Subparagraph (A) shall not apply to gain attributable to periods after December 31, 2018.
(D) Treatment of DC zone
The District of Columbia Enterprise Zone shall not be treated as an empowerment zone for purposes of this paragraph.
(3) Special rules for 2009 and certain periods in 2010
In the case of qualified small business stock acquired after the date of the enactment of this paragraph and on or before the date of the enactment of the Creating Small Business Jobs Act of 2010—
(A) paragraph (1) shall be applied by substituting "75 percent" for "50 percent", and
(B) paragraph (2) shall not apply.
In the case of any stock which would be described in the preceding sentence (but for this sentence), the acquisition date for purposes of this subsection shall be the first day on which such stock was held by the taxpayer determined after the application of section 1223.
(4) 100 percent exclusion for stock acquired during certain periods in 2010 and thereafter
In the case of qualified small business stock acquired after the date of the enactment of the Creating Small Business Jobs Act of 2010—
(A) paragraph (1) shall be applied by substituting "100 percent" for "50 percent",
(B) paragraph (2) shall not apply, and
(C) paragraph (7) of section 57(a) shall not apply.
In the case of any stock which would be described in the preceding sentence (but for this sentence), the acquisition date for purposes of this subsection shall be the first day on which such stock was held by the taxpayer determined after the application of section 1223.
(b) Per-issuer limitation on taxpayer's eligible gain
(1) In general
If the taxpayer has eligible gain for the taxable year from 1 or more dispositions of stock issued by any corporation, the aggregate amount of such gain from dispositions of stock issued by such corporation which may be taken into account under subsection (a) for the taxable year shall not exceed the greater of—
(A) $10,000,000 reduced by the aggregate amount of eligible gain taken into account by the taxpayer under subsection (a) for prior taxable years and attributable to dispositions of stock issued by such corporation, or
(B) 10 times the aggregate adjusted bases of qualified small business stock issued by such corporation and disposed of by the taxpayer during the taxable year.
For purposes of subparagraph (B), the adjusted basis of any stock shall be determined without regard to any addition to basis after the date on which such stock was originally issued.
(2) Eligible gain
For purposes of this subsection, the term "eligible gain" means any gain from the sale or exchange of qualified small business stock held for more than 5 years.
(3) Treatment of married individuals
(A) Separate returns
In the case of a separate return by a married individual, paragraph (1)(A) shall be applied by substituting "$5,000,000" for "$10,000,000".
(B) Allocation of exclusion
In the case of any joint return, the amount of gain taken into account under subsection (a) shall be allocated equally between the spouses for purposes of applying this subsection to subsequent taxable years.
(C) Marital status
For purposes of this subsection, marital status shall be determined under section 7703.
(c) Qualified small business stock
For purposes of this section—
(1) In general
Except as otherwise provided in this section, the term "qualified small business stock" means any stock in a C corporation which is originally issued after the date of the enactment of the Revenue Reconciliation Act of 1993, if—
(A) as of the date of issuance, such corporation is a qualified small business, and
(B) except as provided in subsections (f) and (h), such stock is acquired by the taxpayer at its original issue (directly or through an underwriter)—
(i) in exchange for money or other property (not including stock), or
(ii) as compensation for services provided to such corporation (other than services performed as an underwriter of such stock).
(2) Active business requirement; etc.
(A) In general
Stock in a corporation shall not be treated as qualified small business stock unless, during substantially all of the taxpayer's holding period for such stock, such corporation meets the active business requirements of subsection (e) and such corporation is a C corporation.
(B) Special rule for certain small business investment companies
(i) Waiver of active business requirement
Notwithstanding any provision of subsection (e), a corporation shall be treated as meeting the active business requirements of such subsection for any period during which such corporation qualifies as a specialized small business investment company.
(ii) Specialized small business investment company
For purposes of clause (i), the term "specialized small business investment company" means any eligible corporation (as defined in subsection (e)(4)) which is licensed to operate under section 301(d) of the Small Business Investment Act of 1958 (as in effect on May 13, 1993).
(3) Certain purchases by corporation of its own stock
(A) Redemptions from taxpayer or related person
Stock acquired by the taxpayer shall not be treated as qualified small business stock if, at any time during the 4-year period beginning on the date 2 years before the issuance of such stock, the corporation issuing such stock purchased (directly or indirectly) any of its stock from the taxpayer or from a person related (within the meaning of section 267(b) or 707(b)) to the taxpayer.
(B) Significant redemptions
Stock issued by a corporation shall not be treated as qualified business stock if, during the 2-year period beginning on the date 1 year before the issuance of such stock, such corporation made 1 or more purchases of its stock with an aggregate value (as of the time of the respective purchases) exceeding 5 percent of the aggregate value of all of its stock as of the beginning of such 2-year period.
(C) Treatment of certain transactions
If any transaction is treated under section 304(a) as a distribution in redemption of the stock of any corporation, for purposes of subparagraphs (A) and (B), such corporation shall be treated as purchasing an amount of its stock equal to the amount treated as such a distribution under section 304(a).
(d) Qualified small business
For purposes of this section—
(1) In general
The term "qualified small business" means any domestic corporation which is a C corporation if—
(A) the aggregate gross assets of such corporation (or any predecessor thereof) at all times on or after the date of the enactment of the Revenue Reconciliation Act of 1993 and before the issuance did not exceed $50,000,000,
(B) the aggregate gross assets of such corporation immediately after the issuance (determined by taking into account amounts received in the issuance) do not exceed $50,000,000, and
(C) such corporation agrees to submit such reports to the Secretary and to shareholders as the Secretary may require to carry out the purposes of this section.
(2) Aggregate gross assets
(A) In general
For purposes of paragraph (1), the term "aggregate gross assets" means the amount of cash and the aggregate adjusted bases of other property held by the corporation.
(B) Treatment of contributed property
For purposes of subparagraph (A), the adjusted basis of any property contributed to the corporation (or other property with a basis determined in whole or in part by reference to the adjusted basis of property so contributed) shall be determined as if the basis of the property contributed to the corporation (immediately after such contribution) were equal to its fair market value as of the time of such contribution.
(3) Aggregation rules
(A) In general
All corporations which are members of the same parent-subsidiary controlled group shall be treated as 1 corporation for purposes of this subsection.
(B) Parent-subsidiary controlled group
For purposes of subparagraph (A), the term "parent-subsidiary controlled group" means any controlled group of corporations as defined in section 1563(a)(1), except that—
(i) "more than 50 percent" shall be substituted for "at least 80 percent" each place it appears in section 1563(a)(1), and
(ii) section 1563(a)(4) shall not apply.
(e) Active business requirement
(1) In general
For purposes of subsection (c)(2), the requirements of this subsection are met by a corporation for any period if during such period—
(A) at least 80 percent (by value) of the assets of such corporation are used by such corporation in the active conduct of 1 or more qualified trades or businesses, and
(B) such corporation is an eligible corporation.
(2) Special rule for certain activities
For purposes of paragraph (1), if, in connection with any future qualified trade or business, a corporation is engaged in—
(A) start-up activities described in section 195(c)(1)(A),
(B) activities resulting in the payment or incurring of expenditures which may be treated as research and experimental expenditures under section 174, or
(C) activities with respect to in-house research expenses described in section 41(b)(4),
assets used in such activities shall be treated as used in the active conduct of a qualified trade or business. Any determination under this paragraph shall be made without regard to whether a corporation has any gross income from such activities at the time of the determination.
(3) Qualified trade or business
For purposes of this subsection, the term "qualified trade or business" means any trade or business other than—
(A) any trade or business involving the performance of services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of 1 or more of its employees,
(B) any banking, insurance, financing, leasing, investing, or similar business,
(C) any farming business (including the business of raising or harvesting trees),
(D) any business involving the production or extraction of products of a character with respect to which a deduction is allowable under section 613 or 613A, and
(E) any business of operating a hotel, motel, restaurant, or similar business.
(4) Eligible corporation
For purposes of this subsection, the term "eligible corporation" means any domestic corporation; except that such term shall not include—
(A) a DISC or former DISC,
(B) a regulated investment company, real estate investment trust, or REMIC, and
(C) a cooperative.
(5) Stock in other corporations
(A) Look-thru in case of subsidiaries
For purposes of this subsection, stock and debt in any subsidiary corporation shall be disregarded and the parent corporation shall be deemed to own its ratable share of the subsidiary's assets, and to conduct its ratable share of the subsidiary's activities.
(B) Portfolio stock or securities
A corporation shall be treated as failing to meet the requirements of paragraph (1) for any period during which more than 10 percent of the value of its assets (in excess of liabilities) consists of stock or securities in other corporations which are not subsidiaries of such corporation (other than assets described in paragraph (6)).
(C) Subsidiary
For purposes of this paragraph, a corporation shall be considered a subsidiary if the parent owns more than 50 percent of the combined voting power of all classes of stock entitled to vote, or more than 50 percent in value of all outstanding stock, of such corporation.
(6) Working capital
For purposes of paragraph (1)(A), any assets which—
(A) are held as a part of the reasonably required working capital needs of a qualified trade or business of the corporation, or
(B) are held for investment and are reasonably expected to be used within 2 years to finance research and experimentation in a qualified trade or business or increases in working capital needs of a qualified trade or business,
shall be treated as used in the active conduct of a qualified trade or business. For periods after the corporation has been in existence for at least 2 years, in no event may more than 50 percent of the assets of the corporation qualify as used in the active conduct of a qualified trade or business by reason of this paragraph.
(7) Maximum real estate holdings
A corporation shall not be treated as meeting the requirements of paragraph (1) for any period during which more than 10 percent of the total value of its assets consists of real property which is not used in the active conduct of a qualified trade or business. For purposes of the preceding sentence, the ownership of, dealing in, or renting of real property shall not be treated as the active conduct of a qualified trade or business.
(8) Computer software royalties
For purposes of paragraph (1), rights to computer software which produces active business computer software royalties (within the meaning of section 543(d)(1)) shall be treated as an asset used in the active conduct of a trade or business.
(f) Stock acquired on conversion of other stock
If any stock in a corporation is acquired solely through the conversion of other stock in such corporation which is qualified small business stock in the hands of the taxpayer—
(1) the stock so acquired shall be treated as qualified small business stock in the hands of the taxpayer, and
(2) the stock so acquired shall be treated as having been held during the period during which the converted stock was held.
(g) Treatment of pass-thru entities
(1) In general
If any amount included in gross income by reason of holding an interest in a pass-thru entity meets the requirements of paragraph (2)—
(A) such amount shall be treated as gain described in subsection (a), and
(B) for purposes of applying subsection (b), such amount shall be treated as gain from a disposition of stock in the corporation issuing the stock disposed of by the pass-thru entity and the taxpayer's proportionate share of the adjusted basis of the pass-thru entity in such stock shall be taken into account.
(2) Requirements
An amount meets the requirements of this paragraph if—
(A) such amount is attributable to gain on the sale or exchange by the pass-thru entity of stock which is qualified small business stock in the hands of such entity (determined by treating such entity as an individual) and which was held by such entity for more than 5 years, and
(B) such amount is includible in the gross income of the taxpayer by reason of the holding of an interest in such entity which was held by the taxpayer on the date on which such pass-thru entity acquired such stock and at all times thereafter before the disposition of such stock by such pass-thru entity.
(3) Limitation based on interest originally held by taxpayer
Paragraph (1) shall not apply to any amount to the extent such amount exceeds the amount to which paragraph (1) would have applied if such amount were determined by reference to the interest the taxpayer held in the pass-thru entity on the date the qualified small business stock was acquired.
(4) Pass-thru entity
For purposes of this subsection, the term "pass-thru entity" means—
(A) any partnership,
(B) any S corporation,
(C) any regulated investment company, and
(D) any common trust fund.
(h) Certain tax-free and other transfers
For purposes of this section—
(1) In general
In the case of a transfer described in paragraph (2), the transferee shall be treated as—
(A) having acquired such stock in the same manner as the transferor, and
(B) having held such stock during any continuous period immediately preceding the transfer during which it was held (or treated as held under this subsection) by the transferor.
(2) Description of transfers
A transfer is described in this subsection if such transfer is—
(A) by gift,
(B) at death, or
(C) from a partnership to a partner of stock with respect to which requirements similar to the requirements of subsection (g) are met at the time of the transfer (without regard to the 5-year holding period requirement).
(3) Certain rules made applicable
Rules similar to the rules of section 1244(d)(2) shall apply for purposes of this section.
(4) Incorporations and reorganizations involving nonqualified stock
(A) In general
In the case of a transaction described in section 351 or a reorganization described in section 368, if qualified small business stock is exchanged for other stock which would not qualify as qualified small business stock but for this subparagraph, such other stock shall be treated as qualified small business stock acquired on the date on which the exchanged stock was acquired.
(B) Limitation
This section shall apply to gain from the sale or exchange of stock treated as qualified small business stock by reason of subparagraph (A) only to the extent of the gain which would have been recognized at the time of the transfer described in subparagraph (A) if section 351 or 368 had not applied at such time. The preceding sentence shall not apply if the stock which is treated as qualified small business stock by reason of subparagraph (A) is issued by a corporation which (as of the time of the transfer described in subparagraph (A)) is a qualified small business.
(C) Successive application
For purposes of this paragraph, stock treated as qualified small business stock under subparagraph (A) shall be so treated for subsequent transactions or reorganizations, except that the limitation of subparagraph (B) shall be applied as of the time of the first transfer to which such limitation applied (determined after the application of the second sentence of subparagraph (B)).
(D) Control test
In the case of a transaction described in section 351, this paragraph shall apply only if, immediately after the transaction, the corporation issuing the stock owns directly or indirectly stock representing control (within the meaning of section 368(c)) of the corporation whose stock was exchanged.
(i) Basis rules
For purposes of this section—
(1) Stock exchanged for property
In the case where the taxpayer transfers property (other than money or stock) to a corporation in exchange for stock in such corporation—
(A) such stock shall be treated as having been acquired by the taxpayer on the date of such exchange, and
(B) the basis of such stock in the hands of the taxpayer shall in no event be less than the fair market value of the property exchanged.
(2) Treatment of contributions to capital
If the adjusted basis of any qualified small business stock is adjusted by reason of any contribution to capital after the date on which such stock was originally issued, in determining the amount of the adjustment by reason of such contribution, the basis of the contributed property shall in no event be treated as less than its fair market value on the date of the contribution.
(j) Treatment of certain short positions
(1) In general
If the taxpayer has an offsetting short position with respect to any qualified small business stock, subsection (a) shall not apply to any gain from the sale or exchange of such stock unless—
(A) such stock was held by the taxpayer for more than 5 years as of the first day on which there was such a short position, and
(B) the taxpayer elects to recognize gain as if such stock were sold on such first day for its fair market value.
(2) Offsetting short position
For purposes of paragraph (1), the taxpayer shall be treated as having an offsetting short position with respect to any qualified small business stock if—
(A) the taxpayer has made a short sale of substantially identical property,
(B) the taxpayer has acquired an option to sell substantially identical property at a fixed price, or
(C) to the extent provided in regulations, the taxpayer has entered into any other transaction which substantially reduces the risk of loss from holding such qualified small business stock.
For purposes of the preceding sentence, any reference to the taxpayer shall be treated as including a reference to any person who is related (within the meaning of section 267(b) or 707(b)) to the taxpayer.
(k) Regulations
The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations to prevent the avoidance of the purposes of this section through split-ups, shell corporations, partnerships, or otherwise.
(Added
References in Text
The date of the enactment of this paragraph, referred to in subsec. (a)(2)(A), is the date of enactment of
Section 1400B(b), referred to in subsec. (a)(2)(B), was repealed by
The date of the enactment of this paragraph, referred to in subsec. (a)(3), is the date of enactment of
The date of the enactment of the Creating Small Business Jobs Act of 2010, referred to in subsec. (a)(3), (4), is the date of enactment of
The date of the enactment of the Revenue Reconciliation Act of 1993, referred to in subsecs. (c)(1) and (d)(1)(A), is the date of enactment of
Section 301(d) of the Small Business Investment Act of 1958, referred to in subsec. (c)(2)(B)(ii), was classified to
Prior Provisions
A prior section 1202, acts Aug. 16, 1954, ch. 736,
Amendments
2018—Subsec. (a)(2)(B).
Subsec. (e)(4)(B) to (D).
2015—Subsec. (a)(4).
2014—Subsec. (a)(4).
2013—Subsec. (a)(2)(C).
Subsec. (a)(3).
Subsec. (a)(4).
2010—Subsec. (a)(2)(C).
Subsec. (a)(3).
Subsec. (a)(4).
2009—Subsec. (a)(3).
2004—Subsec. (e)(4)(C).
2000—
Subsec. (a).
1996—Subsec. (e)(4)(C).
Effective Date of 2015 Amendment
Effective Date of 2014 Amendment
Effective Date of 2013 Amendment
"(1)
"(2)
"(3)
Effective Date of 2010 Amendment
Effective Date of 2009 Amendment
Effective Date of 2004 Amendment
Amendment by
Effective Date of 2000 Amendment
Amendment by
Effective Date of 1996 Amendment
Amendment by
Effective Date
Section applicable to stock issued after Aug. 10, 1993, see section 13113(e) of
Savings Provision
Amendment by section 401(d)(4)(B)(v) of
For provisions that nothing in amendment by
Special Rule for Pass-Through Entities
"(i)
"(ii)
"(I) a regulated investment company,
"(II) a real estate investment trust,
"(III) an electing small business corporation,
"(IV) a partnership,
"(V) an estate or trust, and
"(VI) a common trust fund."
PART II—TREATMENT OF CAPITAL LOSSES
Amendments
1969—
§1211. Limitation on capital losses
(a) Corporations
In the case of a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of gains from such sales or exchanges.
(b) Other taxpayers
In the case of a taxpayer other than a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of the gains from such sales or exchanges, plus (if such losses exceed such gains) the lower of—
(1) $3,000 ($1,500 in the case of a married individual filing a separate return), or
(2) the excess of such losses over such gains.
(Aug. 16, 1954, ch. 736,
Amendments
1986—Subsec. (b).
1977—Subsec. (b)(1)(A).
1976—Subsec. (b)(1)(B).
Subsec. (b)(2).
Subsec. (b)(3).
1969—Subsec. (b).
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 501(b)(6) of
Effective Date of 1969 Amendment
§1212. Capital loss carrybacks and carryovers
(a) Corporations
(1) In general
If a corporation has a net capital loss for any taxable year (hereinafter in this paragraph referred to as the "loss year"), the amount thereof shall be—
(A) a capital loss carryback to each of the 3 taxable years preceding the loss year, but only to the extent—
(i) such loss is not attributable to a foreign expropriation capital loss, and
(ii) the carryback of such loss does not increase or produce a net operating loss (as defined in section 172(c)) for the taxable year to which it is being carried back;
(B) except as provided in subparagraph (C), a capital loss carryover to each of the 5 taxable years succeeding the loss year; and
(C) a capital loss carryover to each of the 10 taxable years succeeding the loss year, but only to the extent such loss is attributable to a foreign expropriation loss,
and shall be treated as a short-term capital loss in each such taxable year. The entire amount of the net capital loss for any taxable year shall be carried to the earliest of the taxable years to which such loss may be carried, and the portion of such loss which shall be carried to each of the other taxable years to which such loss may be carried shall be the excess, if any, of such loss over the total of the capital gain net income for each of the prior taxable years to which such loss may be carried. For purposes of the preceding sentence, the capital gain net income for any such prior taxable year shall be computed without regard to the net capital loss for the loss year or for any taxable year thereafter. In the case of any net capital loss which cannot be carried back in full to a preceding taxable year by reason of clause (ii) of subparagraph (A), the capital gain net income for such prior taxable year shall in no case be treated as greater than the amount of such loss which can be carried back to such preceding taxable year upon the application of such clause (ii).
(2) Definitions and special rules
(A) Foreign expropriation capital loss defined
For purposes of this subsection, the term "foreign expropriation capital loss" means, for any taxable year, the sum of the losses taken into account in computing the net capital loss for such year which are—
(i) losses sustained directly by reason of the expropriation, intervention, seizure, or similar taking of property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing, or
(ii) losses (treated under section 165(g)(1) as losses from the sale or exchange of capital assets) from securities which become worthless by reason of the expropriation, intervention, seizure, or similar taking of property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing.
(B) Portion of loss attributable to foreign expropriation capital loss
For purposes of paragraph (1), the portion of any net capital loss for any taxable year attributable to a foreign expropriation capital loss is the amount of the foreign expropriation capital loss for such year (but not in excess of the net capital loss for such year).
(C) Priority of application
For purposes of paragraph (1), if a portion of a net capital loss for any taxable year is attributable to a foreign expropriation capital loss, such portion shall be considered to be a separate net capital loss for such year to be applied after the other portion of such net capital loss.
(3) Regulated investment companies
(A) In general
If a regulated investment company has a net capital loss for any taxable year—
(i) paragraph (1) shall not apply to such loss,
(ii) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss arising on the first day of the next taxable year, and
(iii) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss arising on the first day of the next taxable year.
(B) Coordination with general rule
If a net capital loss to which paragraph (1) applies is carried over to a taxable year of a regulated investment company—
(i) Losses to which this paragraph applies
Clauses (ii) and (iii) of subparagraph (A) shall be applied without regard to any amount treated as a short-term capital loss under paragraph (1).
(ii) Losses to which general rule applies
Paragraph (1) shall be applied by substituting "net capital loss for the loss year or any taxable year thereafter (other than a net capital loss to which paragraph (3)(A) applies)" for "net capital loss for the loss year or any taxable year thereafter".
(4) Special rules on carrybacks
A net capital loss of a corporation shall not be carried back under paragraph (1)(A) to a taxable year—
(A) for which it is a regulated investment company (as defined in section 851), or
(B) for which it is a real estate investment trust (as defined in section 856).
(b) Other taxpayers
(1) In general
If a taxpayer other than a corporation has a net capital loss for any taxable year—
(A) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and
(B) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.
(2) Treatment of amounts allowed under section 1211(b)(1) or (2)
(A) In general
For purposes of determining the excess referred to in subparagraph (A) or (B) of paragraph (1), there shall be treated as a short-term capital gain in the taxable year an amount equal to the lesser of—
(i) the amount allowed for the taxable year under paragraph (1) or (2) of section 1211(b), or
(ii) the adjusted taxable income for such taxable year.
(B) Adjusted taxable income
For purposes of subparagraph (A), the term "adjusted taxable income" means taxable income increased by the sum of—
(i) the amount allowed for the taxable year under paragraph (1) or (2) of section 1211(b), and
(ii) the deduction allowed for such year under section 151 or any deduction in lieu thereof.
For purposes of the preceding sentence, any excess of the deductions allowed for the taxable year over the gross income for such year shall be taken into account as negative taxable income.
(c) Carryback of losses from section 1256 contracts to offset prior gains from such contracts
(1) In general
If a taxpayer (other than a corporation) has a net section 1256 contracts loss for the taxable year and elects to have this subsection apply to such taxable year, the amount of such net section 1256 contracts loss—
(A) shall be a carryback to each of the 3 taxable years preceding the loss year, and
(B) to the extent that, after the application of paragraphs (2) and (3), such loss is allowed as a carryback to any such preceding taxable year—
(i) 40 percent of the amount so allowed shall be treated as a short-term capital loss from section 1256 contracts, and
(ii) 60 percent of the amount so allowed shall be treated as a long-term capital loss from section 1256 contracts.
(2) Amount carried to each taxable year
The entire amount of the net section 1256 contracts loss for any taxable year shall be carried to the earliest of the taxable years to which such loss may be carried back under paragraph (1). The portion of such loss which shall be carried to each of the 2 other taxable years to which such loss may be carried back shall be the excess (if any) of such loss over the portion of such loss which, after the application of paragraph (3), was allowed as a carryback for any prior taxable year.
(3) Amount which may be used in any prior taxable year
An amount shall be allowed as a carryback under paragraph (1) to any prior taxable year only to the extent—
(A) such amount does not exceed the net section 1256 contract gain for such year, and
(B) the allowance of such carryback does not increase or produce a net operating loss (as defined in section 172(c)) for such year.
(4) Net section 1256 contracts loss
For purposes of paragraph (1), the term "net section 1256 contracts loss" means the lesser of—
(A) the net capital loss for the taxable year determined by taking into account only gains and losses from section 1256 contracts, or
(B) the sum of the amounts which, but for paragraph (6)(A), would be treated as capital losses in the succeeding taxable year under subparagraphs (A) and (B) of subsection (b)(1).
(5) Net section 1256 contract gain
For purposes of paragraph (1)—
(A) In general
The term "net section 1256 contract gain" means the lesser of—
(i) the capital gain net income for the taxable year determined by taking into account only gains and losses from section 1256 contracts, or
(ii) the capital gain net income for the taxable year.
(B) Special rule
The net section 1256 contract gain for any taxable year before the loss year shall be computed without regard to the net section 1256 contracts loss for the loss year or for any taxable year thereafter.
(6) Coordination with carryforward provisions of subsection (b)(1)
(A) Carryforward amount reduced by amount used as carryback
For purposes of applying subsection (b)(1), if any portion of the net section 1256 contracts loss for any taxable year is allowed as a carryback under paragraph (1) to any preceding taxable year—
(i) 40 percent of the amount allowed as a carryback shall be treated as a short-term capital gain for the loss year, and
(ii) 60 percent of the amount allowed as a carryback shall be treated as a long-term capital gain for the loss year.
(B) Carryover loss retains character as attributable to section 1256 contract
Any amount carried forward as a short-term or long-term capital loss to any taxable year under subsection (b)(1) (after the application of subparagraph (A)) shall, to the extent attributable to losses from section 1256 contracts, be treated as loss from section 1256 contracts for such taxable year.
(7) Other definitions and special rules
For purposes of this subsection—
(A) Section 1256 contract
The term "section 1256 contract" means any section 1256 contract (as defined in section 1256(b)) to which section 1256 applies.
(B) Exclusion for estates and trusts
This subsection shall not apply to any estate or trust.
(Aug. 16, 1954, ch. 736,
Amendments
2010—Subsec. (a)(1)(C).
"(i) in the case of a regulated investment company (as defined in section 851) to each of the 8 taxable years succeeding the loss year, and
"(ii) to the extent such loss is attributable to a foreign expropriation capital loss, to each of the 10 taxable years succeeding the loss year."
Subsec. (a)(3), (4).
2004—Subsec. (a)(3).
1988—Subsec. (b)(2).
1986—Subsec. (b)(2).
"(A) For purposes of determining the excess referred to in paragraph (1)(A), an amount equal to the amount allowed for the taxable year under section 1211(b)(1)(A), (B), or (C) shall be treated as a short-term capital gain in such year.
"(B) For purposes of determining the excess referred to in paragraph (1)(B), an amount equal to the sum of—
"(i) the amount allowed for the taxable year under section 1211(b)(1)(A), (B), or (C), and
"(ii) the excess of the amount described in clause (i) over the net short-term capital loss (determined without regard to this subsection) for such year,
shall be treated as a short-term capital gain in such year."
Subsec. (c)(6)(B), (7)(A).
1984—Subsec. (b)(3).
Subsec. (c).
Subsec. (c)(3)(A), (5).
Subsec. (c)(6)(B), (7)(A).
1983—Subsec. (c)(4)(A).
1982—Subsec. (a)(3), (4).
1981—Subsec. (c).
1978—Subsec. (a)(1)(C)(ii).
1976—Subsec. (a)(1).
1969—
Subsec. (a)(1).
Subsec. (a)(3), (4).
Subsec. (b).
1964—Subsec. (a).
Effective Date of 2010 Amendment
"(1)
"(2)
"(3)
"(A)
"(B)
Effective Date of 2004 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by section 301(b)(11) of
Effective Date of 1984 Amendment
Amendment by section 102(e)(3) of
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1901(b)(33)(O) of
Effective Date of 1969 Amendment
Amendment by section 513(b) of
Effective Date of 1964 Amendments
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of
Election Not To Carryback Certain Net Capital Losses
"(a) For purposes of applying section 1212(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 512 of the Tax Reform Act of 1969) in the case of a corporation which makes an election under subsection (b), any net capital loss sustained in a taxable year beginning after December 31, 1969, may not be carried back to any taxable year beginning before January 1, 1970, for which it was subject to taxation under section 802 of such Code [
"(b) An election to have the provisions of subsection (a) apply shall be made by a corporation—
"(1) in such form and manner as the Secretary of the Treasury or his delegate may prescribe, and
"(2) not later than the time prescribed by law for filing a claim for credit or refund of overpayment of income tax for the first taxable year beginning after December 31, 1969, in which such corporation sustains a net capital loss.
"(c) The Secretary of the Treasury or his delegate shall prescribe such regulations as he determines necessary to carry out the purposes of this section."
PART III—GENERAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
Amendments
2018—
§1221. Capital asset defined
(a) In general
For purposes of this subtitle, the term "capital asset" means property held by the taxpayer (whether or not connected with his trade or business), but does not include—
(1) stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year, or property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business;
(2) property, used in his trade or business, of a character which is subject to the allowance for depreciation provided in section 167, or real property used in his trade or business;
(3) a patent, invention, model or design (whether or not patented), a secret formula or process, a copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property, held by—
(A) a taxpayer whose personal efforts created such property,
(B) in the case of a letter, memorandum, or similar property, a taxpayer for whom such property was prepared or produced, or
(C) a taxpayer in whose hands the basis of such property is determined, for purposes of determining gain from a sale or exchange, in whole or part by reference to the basis of such property in the hands of a taxpayer described in subparagraph (A) or (B);
(4) accounts or notes receivable acquired in the ordinary course of trade or business for services rendered or from the sale of property described in paragraph (1);
(5) a publication of the United States Government (including the Congressional Record) which is received from the United States Government or any agency thereof, other than by purchase at the price at which it is offered for sale to the public, and which is held by—
(A) a taxpayer who so received such publication, or
(B) a taxpayer in whose hands the basis of such publication is determined, for purposes of determining gain from a sale or exchange, in whole or in part by reference to the basis of such publication in the hands of a taxpayer described in subparagraph (A);
(6) any commodities derivative financial instrument held by a commodities derivatives dealer, unless—
(A) it is established to the satisfaction of the Secretary that such instrument has no connection to the activities of such dealer as a dealer, and
(B) such instrument is clearly identified in such dealer's records as being described in subparagraph (A) before the close of the day on which it was acquired, originated, or entered into (or such other time as the Secretary may by regulations prescribe);
(7) any hedging transaction which is clearly identified as such before the close of the day on which it was acquired, originated, or entered into (or such other time as the Secretary may by regulations prescribe); or
(8) supplies of a type regularly used or consumed by the taxpayer in the ordinary course of a trade or business of the taxpayer.
(b) Definitions and special rules
(1) Commodities derivative financial instruments
For purposes of subsection (a)(6)—
(A) Commodities derivatives dealer
The term "commodities derivatives dealer" means a person which 1 regularly offers to enter into, assume, offset, assign, or terminate positions in commodities derivative financial instruments with customers in the ordinary course of a trade or business.
(B) Commodities derivative financial instrument
(i) In general
The term "commodities derivative financial instrument" means any contract or financial instrument with respect to commodities (other than a share of stock in a corporation, a beneficial interest in a partnership or trust, a note, bond, debenture, or other evidence of indebtedness, or a section 1256 contract (as defined in section 1256(b))), the value or settlement price of which is calculated by or determined by reference to a specified index.
(ii) Specified index
The term "specified index" means any one or more or any combination of—
(I) a fixed rate, price, or amount, or
(II) a variable rate, price, or amount,
which is based on any current, objectively determinable financial or economic information with respect to commodities which is not within the control of any of the parties to the contract or instrument and is not unique to any of the parties' circumstances.
(2) Hedging transaction
(A) In general
For purposes of this section, the term "hedging transaction" means any transaction entered into by the taxpayer in the normal course of the taxpayer's trade or business primarily—
(i) to manage risk of price changes or currency fluctuations with respect to ordinary property which is held or to be held by the taxpayer,
(ii) to manage risk of interest rate or price changes or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, by the taxpayer, or
(iii) to manage such other risks as the Secretary may prescribe in regulations.
(B) Treatment of nonidentification or improper identification of hedging transactions
Notwithstanding subsection (a)(7), the Secretary shall prescribe regulations to properly characterize any income, gain, expense, or loss arising from a transaction—
(i) which is a hedging transaction but which was not identified as such in accordance with subsection (a)(7), or
(ii) which was so identified but is not a hedging transaction.
(3) Sale or exchange of self-created musical works
At the election of the taxpayer, paragraphs (1) and (3) of subsection (a) shall not apply to musical compositions or copyrights in musical works sold or exchanged by a taxpayer described in subsection (a)(3).
(4) Regulations
The Secretary shall prescribe such regulations as are appropriate to carry out the purposes of paragraph (6) and (7) of subsection (a) in the case of transactions involving related parties.
(Aug. 16, 1954, ch. 736,
Amendments
2017—Subsec. (a)(3).
2010—Subsec. (a)(3)(C).
2006—Subsec. (b)(3).
Subsec. (b)(4).
2002—Subsec. (b)(1)(B)(i).
2001—Subsec. (a)(3)(C).
1999—
1981—Pars. (5), (6).
1976—Par. (5).
Par. (6).
1969—Par. (3).
Effective Date of 2017 Amendment
Effective Date of 2010 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by
Effective Date of 2001 Amendment
Amendment by
Effective Date of 1999 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1976 Amendment
Effective Date of 1969 Amendment
1 So in original. Probably should be "who".
§1222. Other terms relating to capital gains and losses
For purposes of this subtitle—
(1) Short-term capital gain
The term "short-term capital gain" means gain from the sale or exchange of a capital asset held for not more than 1 year, if and to the extent such gain is taken into account in computing gross income.
(2) Short-term capital loss
The term "short-term capital loss" means loss from the sale or exchange of a capital asset held for not more than 1 year, if and to the extent that such loss is taken into account in computing taxable income.
(3) Long-term capital gain
The term "long-term capital gain" means gain from the sale or exchange of a capital asset held for more than 1 year, if and to the extent such gain is taken into account in computing gross income.
(4) Long-term capital loss
The term "long-term capital loss" means loss from the sale or exchange of a capital asset held for more than 1 year, if and to the extent that such loss is taken into account in computing taxable income.
(5) Net short-term capital gain
The term "net short-term capital gain" means the excess of short-term capital gains for the taxable year over the short-term capital losses for such year.
(6) Net short-term capital loss
The term "net short-term capital loss" means the excess of short-term capital losses for the taxable year over the short-term capital gains for such year.
(7) Net long-term capital gain
The term "net long-term capital gain" means the excess of long-term capital gains for the taxable year over the long-term capital losses for such year.
(8) Net long-term capital loss
The term "net long-term capital loss" means the excess of long-term capital losses for the taxable year over the long-term capital gains for such year.
(9) Capital gain net income
The term "capital gain net income" means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges.
(10) Net capital loss
The term "net capital loss" means the excess of the losses from sales or exchanges of capital assets over the sum allowed under section 1211. In the case of a corporation, for the purpose of determining losses under this paragraph, amounts which are short-term capital losses under section 1212(a)(1) shall be excluded.
(11) Net capital gain
The term "net capital gain" means the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year.
(Aug. 16, 1954, ch. 736,
Amendments
2014—
2010—Par. (10).
1984—Pars. (1) to (4).
1976—Pars. (1) to (4).
Par. (9).
Par. (11).
1969—Par. (9).
Par. (11).
1964—Pars. (9), (10).
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2010 Amendment
Except as otherwise provided, amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1901(a)(136) of
Effective Date of 1969 Amendment
Amendment by section 511(a) of
Amendment by section 513(c) of
Effective Date of 1964 Amendment
Amendment by
§1223. Holding period of property
For purposes of this subtitle—
(1) In determining the period for which the taxpayer has held property received in an exchange, there shall be included the period for which he held the property exchanged if, under this chapter, the property has, for the purpose of determining gain or loss from a sale or exchange, the same basis in whole or in part in his hands as the property exchanged, and, in the case of such exchanges the property exchanged at the time of such exchange was a capital asset as defined in section 1221 or property described in section 1231. For purposes of this paragraph—
(A) an involuntary conversion described in section 1033 shall be considered an exchange of the property converted for the property acquired, and
(B) a distribution to which section 355 (or so much of section 356 as relates to section 355) applies shall be treated as an exchange.
(2) In determining the period for which the taxpayer has held property however acquired there shall be included the period for which such property was held by any other person, if under this chapter such property has, for the purpose of determining gain or loss from a sale or exchange, the same basis in whole or in part in his hands as it would have in the hands of such other person.
(3) In determining the period for which the taxpayer has held stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility (under section 1091 relating to wash sales) of the loss from the sale or other disposition of substantially identical stock or securities, there shall be included the period for which he held the stock or securities the loss from the sale or other disposition of which was not deductible.
(4) In determining the period for which the taxpayer has held stock or rights to acquire stock received on a distribution, if the basis of such stock or rights is determined under section 307, there shall (under regulations prescribed by the Secretary) be included the period for which he held the stock in the distributing corporation before the receipt of such stock or rights upon such distribution.
(5) In determining the period for which the taxpayer has held stock or securities acquired from a corporation by the exercise of rights to acquire such stock or securities, there shall be included only the period beginning with the date on which the right to acquire was exercised.
[(6) Repealed.
(7) In determining the period for which the taxpayer has held a commodity acquired in satisfaction of a commodity futures contract (other than a commodity futures contract to which section 1256 applies) there shall be included the period for which he held the commodity futures contract if such commodity futures contract was a capital asset in his hands.
[(8) Repealed.
(9) In the case of a person acquiring property from a decedent or to whom property passed from a decedent (within the meaning of section 1014(b)), if—
(A) the basis of such property in the hands of such person is determined under section 1014, and
(B) such property is sold or otherwise disposed of by such person within 1 year after the decedent's death,
then such person shall be considered to have held such property for more than 1 year.
(10) If—
(A) property is acquired by any person in a transfer to which section 1040 applies,
(B) such property is sold or otherwise disposed of by such person within 1 year after the decedent's death, and
(C) such sale or disposition is to a person who is a qualified heir (as defined in section 2032A(e)(1)) with respect to the decedent,
then the person making such sale or other disposition shall be considered to have held such property for more than 1 year.
(11) In determining the period for which the taxpayer has held qualified replacement property (within the meaning of section 1042(b)) the acquisition of which resulted under section 1042 in the nonrecognition of any part of the gain realized on the sale of qualified securities (within the meaning of section 1042(b)), there shall be included the period for which such qualified securities had been held by the taxpayer.
(12) In determining the period for which the taxpayer has held property the acquisition of which resulted under section 1043 in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which such other property had been held as of the date of such sale.
(13) Except for purposes of subsections (a)(2) and (c)(2)(A) of section 1202, in determining the period for which the taxpayer has held property the acquisition of which resulted under section 1045 or 1397B in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which such other property has been held as of the date of such sale.
(14) If the security to which a securities futures contract (as defined in section 1234B) relates (other than a contract to which section 1256 applies) is acquired in satisfaction of such contract, in determining the period for which the taxpayer has held such security, there shall be included the period for which the taxpayer held such contract if such contract was a capital asset in the hands of the taxpayer.
(15)
For special holding period provision relating to certain partnership distributions, see section 735(b).
(Aug. 16, 1954, ch. 736,
Amendments
2018—Par. (13).
2014—Par. (1).
Par. (4).
Par. (6).
Par. (8).
2005—Pars. (3) to (16).
2004—Pars. (10) to (17).
2000—Par. (15).
Pars. (16), (17).
1998—Pars. (11), (12).
1997—Par. (7).
Pars. (15), (16).
1989—Pars. (14), (15).
1988—Par. (14).
1984—Pars. (11), (12).
Par. (13).
Par. (14).
1983—Par. (8).
Pars. (12), (13).
1980—Par. (11)(A).
1978—Par. (11)(A).
1976—Par. (5).
Par. (11).
1970—Pars. (11), (12).
1962—Pars. (10), (11).
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2005 Amendment
Amendment by
Effective Date of 2004 Amendment
Amendment by
Effective Date of 2000 Amendment
Amendment by section 1(a)(7) [title I, §116(b)(2)] of
Amendment by section 1(a)(7) [title IV, §401(h)(1)] of
Effective Date of 1998 Amendment
Amendment by section 5001(a)(5) of
Amendment by section 6005(d)(4) of
Effective Date of 1997 Amendment
Amendment by section 312(d)(9) of
Amendment by section 313(b)(2) of
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by section 541(b)(1) of
Amendment by section 1001(b)(14) of
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1980 Amendment and Revival of Prior Law
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1976 Amendment
Effective Date of 1970 Amendment
Amendment by
Effective Date of 1962 Amendment
Amendment by
Repeals
Savings Provision
Amendment by
For provisions that nothing in amendment by
PART IV—SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
Amendments
2018—
2004—
2000—
1999—
1997—
1993—
1990—
1988—
1986—
1984—
1982—
1981—
1978—
1976—
1969—
1964—
1962—
1958—
1 So in original. Does not conform to section catchline.
§1231. Property used in the trade or business and involuntary conversions
(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—
(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.
(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 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
(ii) 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.
(b) Definition of property used in the trade or business
For purposes of this section—
(1) General rule
The term "property used in the trade or business" means property used in the trade or business, of a character which is subject to the allowance for depreciation provided in section 167, held for more than 1 year, and real property used in the trade or business, held for more than 1 year, which is not—
(A) property of a kind which would properly be includible in the inventory of the taxpayer if on hand at the close of the taxable year,
(B) property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business,
(C) a patent, invention, model or design (whether or not patented), a secret formula or process, a copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property, held by a taxpayer described in paragraph (3) of section 1221(a), or
(D) a publication of the United States Government (including the Congressional Record) which is received from the United States Government, or any agency thereof, other than by purchase at the price at which it is offered for sale to the public, and which is held by a taxpayer described in paragraph (5) of section 1221(a).
(2) Timber, coal, or domestic iron ore
Such term includes timber, coal, and iron ore with respect to which section 631 applies.
(3) Livestock
Such term includes—
(A) cattle and horses, regardless of age, held by the taxpayer for draft, breeding, dairy, or sporting purposes, and held by him for 24 months or more from the date of acquisition, and
(B) other livestock, regardless of age, held by the taxpayer for draft, breeding, dairy, or sporting purposes, and held by him for 12 months or more from the date of acquisition.
Such term does not include poultry.
(4) Unharvested crop
In the case of an unharvested crop on land used in the trade or business and held for more than 1 year, if the crop and the land are sold or exchanged (or compulsorily or involuntarily converted) at the same time and to the same person, the crop shall be considered as "property used in the trade or business."
(c) Recapture of net ordinary losses
(1) In general
The net section 1231 gain for any taxable year shall be treated as ordinary income to the extent such gain does not exceed the non-recaptured net section 1231 losses.
(2) Non-recaptured net section 1231 losses
For purposes of this subsection, the term "non-recaptured net section 1231 losses" means the excess of—
(A) the aggregate amount of the net section 1231 losses for the 5 most recent preceding taxable years, over
(B) the portion of such losses taken into account under paragraph (1) for such preceding taxable years.
(3) Net section 1231 gain
For purposes of this subsection, the term "net section 1231 gain" means the excess of—
(A) the section 1231 gains, over
(B) the section 1231 losses.
(4) Net section 1231 loss
For purposes of this subsection, the term "net section 1231 loss" means the excess of—
(A) the section 1231 losses, over
(B) the section 1231 gains.
(5) Special rules
For purposes of determining the amount of the net section 1231 gain or loss for any taxable year, the rules of paragraph (4) of subsection (a) shall apply.
(Aug. 16, 1954, ch. 736,
Amendments
2017—Subsec. (b)(1)(C).
2014—Subsec. (c)(2)(A).
1999—Subsec. (b)(1)(C), (D).
1984—Subsec. (a).
"(1) in determining under this subsection whether gains exceed losses, the gains described therein shall be included only if and to the extent taken into account in computing gross income and the losses described therein shall be included only if and to the extent taken into account in computing taxable income, except that section 1211 shall not apply; and
"(2) losses (including losses not compensated for by insurance or otherwise) upon the destruction, in whole or in part, theft or seizure, or requisition or condemnation of (A) property used in the trade or business or (B) capital assets held for more than 1 year shall be considered losses from a compulsory or involuntary conversion.
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 property used in the trade or business or of any capital asset held for more than 1 year, 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."
Subsec. (b)(1), (4).
Subsec. (c).
1981—Subsec. (b)(1)(D).
1978—Subsec. (b)(1)(D).
1976—Subsecs. (a), (b)(1), (4).
1969—Subsec. (a).
Subsec. (b)(1)(C).
Subsec. (b)(3).
1964—Subsec. (b)(2).
1958—Subsec. (a).
Effective Date of 2017 Amendment
Amendment by
Effective Date of 2014 Amendment
Amendment by
Effective Date of 1999 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by section 711(c)(2)(A)(iii) of
Amendment by section 1001(b)(15) of
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1978 Amendment
Effective Date of 1976 Amendment
Effective Date of 1969 Amendment
Amendment by section 514(b)(2) of
Amendment by section 516(b) of
Effective Date of 1964 Amendment
Amendment by
Effective Date of 1958 Amendment
[§§1232 to 1232B. Repealed. Pub. L. 98–369, div. A, title I, §42(a)(1), July 18, 1984, 98 Stat. 556 ]
Section 1232, acts Aug. 16, 1954, ch. 736,
Section 1232A, added
Section 1232B, added
Effective Date of Repeal
Repeal applicable to taxable years ending after July 18, 1984, see section 44 of
§1233. Gains and losses from short sales
(a) Capital assets
For purposes of this subtitle, gain or loss from the short sale of property shall be considered as gain or loss from the sale or exchange of a capital asset to the extent that the property, including a commodity future, used to close the short sale constitutes a capital asset in the hands of the taxpayer.
(b) Short-term gains and holding periods
If gain or loss from a short sale is considered as gain or loss from the sale or exchange of a capital asset under subsection (a) and if on the date of such short sale substantially identical property has been held by the taxpayer for not more than 1 year (determined without regard to the effect, under paragraph (2) of this subsection, of such short sale on the holding period), or if substantially identical property is acquired by the taxpayer after such short sale and on or before the date of the closing thereof—
(1) any gain on the closing of such short sale shall be considered as a gain on the sale or exchange of a capital asset held for not more than 1 year (notwithstanding the period of time any property used to close such short sale has been held); and
(2) the holding period of such substantially identical property shall be considered to begin (notwithstanding section 1223, relating to the holding period of property) on the date of the closing of the short sale, or on the date of a sale, gift, or other disposition of such property, whichever date occurs first. This paragraph shall apply to such substantially identical property in the order of the dates of the acquisition of such property, but only to so much of such property as does not exceed the quantity sold short.
For purposes of this subsection, the acquisition of an option to sell property at a fixed price shall be considered as a short sale, and the exercise or failure to exercise such option shall be considered as a closing of such short sale.
(c) Certain options to sell
Subsection (b) shall not include an option to sell property at a fixed price acquired on the same day on which the property identified as intended to be used in exercising such option is acquired and which, if exercised, is exercised through the sale of the property so identified. If the option is not exercised, the cost of the option shall be added to the basis of the property with which the option is identified. This subsection shall apply only to options acquired after August 16, 1954.
(d) Long-term losses
If on the date of such short sale substantially identical property has been held by the taxpayer for more than 1 year, any loss on the closing of such short sale shall be considered as a loss on the sale or exchange of a capital asset held for more than 1 year (notwithstanding the period of time any property used to close such short sale has been held, and notwithstanding section 1234).
(e) Rules for application of section
(1) Subsection (b)(1) or (d) shall not apply to the gain or loss, respectively, on any quantity of property used to close such short sale which is in excess of the quantity of the substantially identical property referred to in the applicable subsection.
(2) For purposes of subsections (b) and (d)—
(A) the term "property" includes only stocks and securities (including stocks and securities dealt with on a "when issued" basis), and commodity futures, which are capital assets in the hands of the taxpayer, but does not include any position to which section 1092(b) applies;
(B) in the case of futures transactions in any commodity on or subject to the rules of a board of trade or commodity exchange, a commodity future requiring delivery in 1 calendar month shall not be considered as property substantially identical to another commodity future requiring delivery in a different calendar month;
(C) in the case of a short sale of property by an individual, the term "taxpayer", in the application of this subsection and subsections (b) and (d), shall be read as "taxpayer or his spouse"; but an individual who is legally separated from the taxpayer under a decree of divorce or of separate maintenance shall not be considered as the spouse of the taxpayer;
(D) a securities futures contract (as defined in section 1234B) to acquire substantially identical property shall be treated as substantially identical property; and
(E) entering into a securities futures contract (as so defined) to sell shall be considered to be a short sale, and the settlement of such contract shall be considered to be the closing of such short sale.
(3) Where the taxpayer enters into 2 commodity futures transactions on the same day, one requiring delivery by him in one market and the other requiring delivery to him of the same (or substantially identical) commodity in the same calendar month in a different market, and the taxpayer subsequently closes both such transactions on the same day, subsections (b) and (d) shall have no application to so much of the commodity involved in either such transaction as does not exceed in quantity the commodity involved in the other.
(4)(A) In the case of a taxpayer who is a dealer in securities (within the meaning of section 1236)—
(i) if, on the date of a short sale of stock, substantially identical property which is a capital asset in the hands of the taxpayer has been held for not more than 1 year, and
(ii) if such short sale is closed more than 20 days after the date on which it was made,
subsection (b)(2) shall apply in respect of the holding period of such substantially identical property.
(B) For purposes of subparagraph (A)—
(i) the last sentence of subsection (b) applies; and
(ii) the term "stock" means any share or certificate of stock in a corporation, any bond or other evidence of indebtedness which is convertible into any such share or certificate, or any evidence of an interest in, or right to subscribe to or purchase, any of the foregoing.
(f) Arbitrage operations in securities
In the case of a short sale which had been entered into as an arbitrage operation, to which sale the rule of subsection (b)(2) would apply except as otherwise provided in this subsection—
(1) subsection (b)(2) shall apply first to substantially identical assets acquired for arbitrage operations held at the close of business on the day such sale is made, and only to the extent that the quantity sold short exceeds the substantially identical assets acquired for arbitrage operations held at the close of business on the day such sale is made, shall the holding period of any other such identical assets held by the taxpayer be affected;
(2) in the event that assets acquired for arbitrage operations are disposed of in such manner as to create a net short position in assets acquired for arbitrage operations, such net short position shall be deemed to constitute a short sale made on that day;
(3) for the purpose of paragraphs (1) and (2) of this subsection the taxpayer will be deemed as of the close of any business day to hold property which he is or will be entitled to receive or acquire by virtue of any other asset acquired for arbitrage operations or by virtue of any contract he has entered into in an arbitrage operation; and
(4) for the purpose of this subsection arbitrage operations are transactions involving the purchase and sale of assets for the purpose of profiting from a current difference between the price of the asset purchased and the price of the asset sold, and in which the asset purchased, if not identical to the asset sold, is such that by virtue thereof the taxpayer is, or will be, entitled to acquire assets identical to the assets sold. Such operations must be clearly identified by the taxpayer in his records as arbitrage operations on the day of the transaction or as soon thereafter as may be practicable. Assets acquired for arbitrage operations will include stocks and securities and the right to acquire stocks and securities.
(g) Hedging transactions
This section shall not apply in the case of a hedging transaction in commodity futures.
(h) Short sales of property which becomes substantially worthless
(1) In general
If—
(A) the taxpayer enters into a short sale of property, and
(B) such property becomes substantially worthless,
the taxpayer shall recognize gain in the same manner as if the short sale were closed when the property becomes substantially worthless. To the extent provided in regulations prescribed by the Secretary, the preceding sentence also shall apply with respect to any option with respect to property, any offsetting notional principal contract with respect to property, any futures or forward contract to deliver any property, and any other similar transaction.
(2) Statute of limitations
If property becomes substantially worthless during a taxable year and any short sale of such property remains open at the time such property becomes substantially worthless, then—
(A) the statutory period for the assessment of any deficiency attributable to any part of the gain on such transaction shall not expire before the earlier of—
(i) the date which is 3 years after the date the Secretary is notified by the taxpayer (in such manner as the Secretary may by regulations prescribe) of the substantial worthlessness of such property, or
(ii) the date which is 6 years after the date the return for such taxable year is filed, and
(B) such deficiency may be assessed before the date applicable under subparagraph (A) notwithstanding the provisions of any other law or rule of law which would otherwise prevent such assessment.
(Aug. 16, 1954, ch. 736,
Amendments
2002—Subsec. (e)(2)(E).
2000—Subsec. (e)(2)(D).
1997—Subsec. (h).
1984—Subsecs. (b), (d), (e)(4)(A)(i).
1981—Subsec. (e)(2)(A).
1976—Subsec. (b).
Subsec. (c).
Subsecs. (d), (e)(4)(A)(i).
1958—Subsec. (a).
Subsec. (e)(4).
Subsec. (g).
1955—Subsec. (f). Act Aug. 12, 1955, added subsec. (f).
Effective Date of 2002 Amendment
Amendment by
Effective Date of 1997 Amendment
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1901(a)(137) of
Effective Date of 1958 Amendment
Amendment by section 52(b) of
Effective Date of 1955 Amendment
Act Aug. 12, 1955, ch. 871, §2,
§1234. Options to buy or sell
(a) Treatment of gain or loss in the case of the purchaser
(1) General rule
Gain or loss attributable to the sale or exchange of, or loss attributable to failure to exercise, an option to buy or sell property shall be considered gain or loss from the sale or exchange of property which has the same character as the property to which the option relates has in the hands of the taxpayer (or would have in the hands of the taxpayer if acquired by him).
(2) Special rule for loss attributable to failure to exercise option
For purposes of paragraph (1), if loss is attributable to failure to exercise an option, the option shall be deemed to have been sold or exchanged on the day it expired.
(3) Nonapplication of subsection
This subsection shall not apply to—
(A) an option which constitutes property described in paragraph (1) of section 1221(a);
(B) in the case of gain attributable to the sale or exchange of an option, any income derived in connection with such option which, without regard to this subsection, is treated as other than gain from the sale or exchange of a capital asset; and
(C) a loss attributable to failure to exercise an option described in section 1233(c).
(b) Treatment of grantor of option in the case of stock, securities, or commodities
(1) General rule
In the case of the grantor of the option, gain or loss from any closing transaction with respect to, and gain on lapse of, an option in property shall be treated as a gain or loss from the sale or exchange of a capital asset held not more than 1 year.
(2) Definitions
For purposes of this subsection—
(A) Closing transaction
The term "closing transaction" means any termination of the taxpayer's obligation under an option in property other than through the exercise or lapse of the option.
(B) Property
The term "property" means stocks and securities (including stocks and securities dealt with on a "when issued" basis), commodities, and commodity futures.
(3) Nonapplication of subsection
This subsection shall not apply to any option granted in the ordinary course of the taxpayer's trade or business of granting options.
(c) Treatment of options on section 1256 contracts and cash settlement options
(1) Section 1256 contracts
Gain or loss shall be recognized on the exercise of an option on a section 1256 contract (within the meaning of section 1256(b)).
(2) Treatment of cash settlement options
(A) In general
For purposes of subsections (a) and (b), a cash settlement option shall be treated as an option to buy or sell property.
(B) Cash settlement option
For purposes of subparagraph (A), the term "cash settlement option" means any option which on exercise settles in (or could be settled in) cash or property other than the underlying property.
(Aug. 16, 1954, ch. 376,
Amendments
1999—Subsec. (a)(3)(A).
1984—Subsec. (b)(1).
Subsec. (c).
1976—Subsec. (a).
Subsec. (b).
Subsec. (b)(1).
Subsec. (c).
Subsec. (d).
1966—Subsecs. (c), (d).
1958—
Effective Date of 1999 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by section 1001(b)(18) of
Effective Date of 1976 Amendment
Effective Date of 1966 Amendment
Effective Date of 1958 Amendment
Amendment by
§1234A. Gains or losses from certain terminations
Gain or loss attributable to the cancellation, lapse, expiration, or other termination of—
(1) a right or obligation (other than a securities futures contract, as defined in section 1234B) with respect to property which is (or on acquisition would be) a capital asset in the hands of the taxpayer, or
(2) a section 1256 contract (as defined in section 1256) not described in paragraph (1) which is a capital asset in the hands of the taxpayer,
shall be treated as gain or loss from the sale of a capital asset. The preceding sentence shall not apply to the retirement of any debt instrument (whether or not through a trust or other participation arrangement).
(Added
Amendments
2002—Pars. (1) to (3).
2000—Par. (1).
Par. (3).
1997—Par. (1).
1984—
Par. (2).
1983—
Effective Date of 2002 Amendment
Amendment by
Effective Date of 1997 Amendment
Effective Date of 1984 Amendment
Amendment by section 102(e)(4) of
Effective Date of 1983 Amendment
Amendment by
Effective Date
Section applicable to property acquired and positions established by the taxpayer after June 23, 1981, in taxable years ending after such date, and applicable when so elected with respect to property held on June 23, 1981, see section 508 of
§1234B. Gains or losses from securities futures contracts
(a) Treatment of gain or loss
(1) In general
Gain or loss attributable to the sale, exchange, or termination of a securities futures contract shall be considered gain or loss from the sale or exchange of property which has the same character as the property to which the contract relates has in the hands of the taxpayer (or would have in the hands of the taxpayer if acquired by the taxpayer).
(2) Nonapplication of subsection
This subsection shall not apply to—
(A) a contract which constitutes property described in paragraph (1) or (7) of section 1221(a), and
(B) any income derived in connection with a contract which, without regard to this subsection, is treated as other than gain from the sale or exchange of a capital asset.
(b) Short-term gains and losses
Except as provided in the regulations under section 1092(b) or this section, or in section 1233, if gain or loss on the sale, exchange, or termination of a securities futures contract to sell property is considered as gain or loss from the sale or exchange of a capital asset, such gain or loss shall be treated as short-term capital gain or loss.
(c) Securities futures contract
For purposes of this section, the term "securities futures contract" means any security future (as defined in section 3(a)(55)(A) of the Securities Exchange Act of 1934, as in effect on the date of the enactment of this section). The Secretary may prescribe regulations regarding the status of contracts the values of which are determined directly or indirectly by reference to any index which becomes (or ceases to be) a narrow-based security index (as defined for purposes of section 1256(g)(6)).
(d) Contracts not treated as commodity futures contracts
For purposes of this title, a securities futures contract shall not be treated as a commodity futures contract.
(e) Regulations
The Secretary shall prescribe such regulations as may be appropriate to provide for the proper treatment of securities futures contracts under this title.
(f) Cross reference
For special rules relating to dealer securities futures contracts, see section 1256.
(Added
References in Text
Section 3(a)(55)(A) of the Securities Exchange Act of 1934, referred to in subsec. (c), is classified to
The date of the enactment of this section, referred to in subsec. (c), is the date of enactment of
Codification
Amendments
2004—Subsec. (c).
2002—Subsec. (a)(1).
Subsec. (b).
Subsec. (f).
Effective Date of 2004 Amendment
Effective Date of 2002 Amendment
Amendment by
§1235. Sale or exchange of patents
(a) General
A transfer (other than by gift, inheritance, or devise) of property consisting of all substantial rights to a patent, or an undivided interest therein which includes a part of all such rights, by any holder shall be considered the sale or exchange of a capital asset held for more than 1 year, regardless of whether or not payments in consideration of such transfer are—
(1) payable periodically over a period generally coterminous with the transferee's use of the patent, or
(2) contingent on the productivity, use, or disposition of the property transferred.
(b) "Holder" defined
For purposes of this section, the term "holder" means—
(1) any individual whose efforts created such property, or
(2) any other individual who has acquired his interest in such property in exchange for consideration in money or money's worth paid to such creator prior to actual reduction to practice of the invention covered by the patent, if such individual is neither—
(A) the employer of such creator, nor
(B) related to such creator (within the meaning of subsection (c)).
(c) Related persons
Subsection (a) shall not apply to any transfer, directly or indirectly, between persons specified within any one of the paragraphs of section 267(b) or persons described in section 707(b); except that, in applying section 267(b) and (c) and section 707(b) for purposes of this section—
(1) the phrase "25 percent or more" shall be substituted for the phrase "more than 50 percent" each place it appears in section 267(b) or 707(b), and
(2) paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants.
(d) Cross reference
For special rule relating to nonresident aliens, see section 871(a).
(Aug. 16, 1954, ch. 736,
Amendments
2014—Subsec. (b)(2)(B).
Subsecs. (c) to (e).
1998—Subsec. (a).
1984—Subsec. (a).
Subsec. (d).
1976—Subsec. (a).
1958—Subsec. (d).
Effective Date of 2014 Amendment
Amendment by
Effective Date of 1998 Amendment
Amendment by section 5001 of
Amendment by section 6000(d)(4) of
Effective Date of 1984 Amendment
Amendment by section 174(b)(5)(C) of
Amendment by section 1001(b)(19) of
Effective Date of 1976 Amendment
Effective Date of 1958 Amendment
§1236. Dealers in securities
(a) Capital gains
Gain by a dealer in securities from the sale or exchange of any security shall in no event be considered as gain from the sale or exchange of a capital asset unless—
(1) the security was, before the close of the day on which it was acquired (or such earlier time as the Secretary may prescribe by regulations), clearly identified in the dealer's records as a security held for investment; and
(2) the security was not, at any time after the close of such day (or such earlier time), held by such dealer primarily for sale to customers in the ordinary course of his trade or business.
(b) Ordinary losses
Loss by a dealer in securities from the sale or exchange of any security shall, except as otherwise provided in section 582(c), (relating to bond, etc., losses of banks), in no event be considered as ordinary loss if at any time the security was clearly identified in the dealer's records as a security held for investment.
(c) Definition of security
For purposes of this section, the term "security" means any share of stock in any corporation, certificate of stock or interest in any corporation, note, bond, debenture, or evidence of indebtedness, or any evidence of an interest in or right to subscribe to or purchase any of the foregoing.
(d) Special rule for floor specialists
(1) In general
In the case of a floor specialist (but only with respect to acquisitions, in connection with his duties on an exchange, of stock in which the specialist is registered with the exchange), subsection (a) shall be applied—
(A) by inserting "the 7th business day following" before "the day" the first place it appears in paragraph (1) and by inserting "7th business" before "day" in paragraph (2), and
(B) by striking the parenthetical phrase in paragraph (1).
(2) Floor specialist
The term "floor specialist" means a person who is—
(A) a member of a national securities exchange,
(B) is registered as a specialist with the exchange, and
(C) meets the requirements for specialists established by the Securities and Exchange Commission.
(e) Special rule for options
For purposes of subsection (a), any security acquired by a dealer pursuant to an option held by such dealer may be treated as held for investment only if the dealer, before the close of the day on which the option was acquired, clearly identified the option on his records as held for investment. For purposes of the preceding sentence, the term "option" includes the right to subscribe to or purchase any security.
(Aug. 16, 1954, ch. 736,
Amendments
2014—Subsec. (b).
1984—Subsec. (a)(1).
Subsec. (a)(2).
1983—Subsec. (e).
1981—Subsec. (a).
Subsec. (d).
1976—Subsec. (b).
Effective Date of 2014 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1983 Amendment
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
§1237. Real property subdivided for sale
(a) General
Any lot or parcel which is part of a tract of real property in the hands of a taxpayer other than a C corporation shall not be deemed to be held primarily for sale to customers in the ordinary course of trade or business at the time of sale solely because of the taxpayer having subdivided such tract for purposes of sale or because of any activity incident to such subdivision or sale, if—
(1) such tract, or any lot or parcel thereof, had not previously been held by such taxpayer primarily for sale to customers in the ordinary course of trade or business (unless such tract at such previous time would have been covered by this section) and, in the same taxable year in which the sale occurs, such taxpayer does not so hold any other real property; and
(2) no substantial improvement that substantially enhances the value of the lot or parcel sold is made by the taxpayer on such tract while held by the taxpayer or is made pursuant to a contract of sale entered into between the taxpayer and the buyer. For purposes of this paragraph, an improvement shall be deemed to be made by the taxpayer if such improvement was made by—
(A) the taxpayer or members of his family (as defined in section 267(c)(4)), by a corporation controlled by the taxpayer, an S corporation which included the taxpayer as a shareholder, or by a partnership which included the taxpayer as a partner; or
(B) a lessee, but only if the improvement constitutes income to the taxpayer; or
(C) Federal, State, or local government, or political subdivision thereof, but only if the improvement constitutes an addition to basis for the taxpayer; and
(3) such lot or parcel, except in the case of real property acquired by inheritance or devise, is held by the taxpayer for a period of 5 years.
(b) Special rules for application of section
(1) Gains
If more than 5 lots or parcels contained in the same tract of real property are sold or exchanged, gain from any sale or exchange (which occurs in or after the taxable year in which the sixth lot or parcel is sold or exchanged) of any lot or parcel which comes within the provisions of paragraphs (1), (2) and (3) of subsection (a) of this section shall be deemed to be gain from the sale of property held primarily for sale to customers in the ordinary course of the trade or business to the extent of 5 percent of the selling price.
(2) Expenditures of sale
For the purpose of computing gain under paragraph (1) of this subsection, expenditures incurred in connection with the sale or exchange of any lot or parcel shall neither be allowed as a deduction in computing taxable income, nor treated as reducing the amount realized on such sale or exchange; but so much of such expenditures as does not exceed the portion of gain deemed under paragraph (1) of this subsection to be gain from the sale of property held primarily for sale to customers in the ordinary course of trade or business shall be so allowed as a deduction, and the remainder, if any, shall be treated as reducing the amount realized on such sale or exchange.
(3) Necessary improvements
No improvement shall be deemed a substantial improvement for purposes of subsection (a) if the lot or parcel is held by the taxpayer for a period of 10 years and if—
(A) such improvement is the building or installation of water, sewer, or drainage facilities or roads (if such improvement would except for this paragraph constitute a substantial improvement);
(B) it is shown to the satisfaction of the Secretary that the lot or parcel, the value of which was substantially enhanced by such improvement, would not have been marketable at the prevailing local price for similar building sites without such improvement; and
(C) the taxpayer elects, in accordance with regulations prescribed by the Secretary, to make no adjustment to basis of the lot or parcel, or of any other property owned by the taxpayer, on account of the expenditures for such improvements. Such election shall not make any item deductible which would not otherwise be deductible.
(c) Tract defined
For purposes of this section, the term "tract of real property" means a single piece of real property, except that 2 or more pieces of real property shall be considered a tract if at any time they were contiguous in the hands of the taxpayer or if they would be contiguous except for the interposition of a road, street, railroad, stream, or similar property. If, following the sale or exchange of any lot or parcel from a tract of real property, no further sales or exchanges of any other lots or parcels from the remainder of such tract are made for a period of 5 years, such remainder shall be deemed a tract.
(Aug. 16, 1954, ch. 736,
Amendments
1996—Subsec. (a).
Subsec. (a)(2)(A).
1976—Subsec. (b)(3)(B), (C).
Subsec. (d).
1971—Subsec. (a).
Subsec. (b).
1958—Subsec. (a)(1).
1956—Subsec. (a). Act Apr. 27, 1956, §1, substituted "(including corporations only if no shareholder directly or indirectly holds real property for sale to customers in the ordinary course of trade or business and only in the case of property described in the last sentence of subsection (b)(3))" for "other than a corporation".
Subsec. (b)(3). Act Apr. 27, 1956, §2, substituted "water, sewer, or drainage facilities" for "water or sewer facilities" in subpar. (A), and inserted provision at end that requirements of subpars. (B) and (C) do not apply to certain specified property.
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1901(a)(138) of
Effective Date of 1971 Amendment
Effective Date of 1958 Amendment
Amendment by
Effective Date of 1956 Amendment
Act Apr. 27, 1956, ch. 214, §3,
Sales or Exchanges by Corporations of Real Property Held More Than 25 Years
"(1) no shareholder of the corporation directly or indirectly holds real property primarily for sale to customers in the ordinary course of trade or business; and
"(2)(A) such lot or parcel is a part of real property (i) held for more than twenty-five years at the time of sale or exchange, and (ii) acquired before January 1, 1934, by the corporation as a result of the foreclosure of a lien (or liens) thereon which secured the payment of indebtedness held by one or more creditors who transferred one or more foreclosure bids to the corporation in exchange for all its stock (with or without other consideration), or
"(B)(i) such lot or parcel is a part of additional real property acquired before January 1, 1957, by the corporation in the near vicinity of any real property to which subparagraph (A) applies, or
"(ii) such lot or parcel is wholly or to some extent a part of any minor acquisition made after December 31, 1956, by the corporation to adjust boundaries, to fill gaps in previously acquired property, to facilitate the installation of streets, utilities, and other public facilities, or to facilitate the sale of adjacent property, or
"(iii) such lot or parcel is wholly or to some extent a part of a reacquisition by the corporation after December 31, 1956, of property previously owned by the corporation;
but only if at least 80 percent (as measured by area) of the real property sold or exchanged by the corporation within the taxable year is property described in subparagraph (A); and
"(3) there were no acquisitions of real property by the corporation after December 31, 1956, other than—
"(A) acquisitions described in paragraph (2)(B)(ii) and reacquisitions described in paragraph (2)(B)(iii), or
"(B) acquisitions of real property used in a trade or business of the corporation or held for investment by the corporation; and
"(4) the corporation did not after December 31, 1957, sell or exchange (except in condemnation or under threat of condemnation) any residential lot or parcel on which, at the time of the sale or exchange, there existed any substantial improvements (other than improvements in existence at the time the land was acquired by the corporation) except subdivision, clearing, grubbing, and grading, building or installation of water, sewer, and drainage facilities, construction of roads, streets, and sidewalks, and installation of utilities."
In any case in which a corporation referred to in paragraphs (1), (2), (3), and (4) is a member of an affiliated group as defined in section 1504(a) of the Internal Revenue Code of 1986, such affiliated group shall, for purposes of such paragraphs, be treated as a single corporation.
"(b)(1) Gain from any sale or exchange described in subsection (a) shall be deemed, for purposes of such Code, to be gain from the sale of property held primarily for sale to customers in the ordinary course of trade or business to the extent of 5 percent of the selling price.
"(2) For the purpose of computing gain under paragraph (1), expenditures incurred in connection with the sale or exchange of any lot or parcel shall neither be allowed as a deduction in computing taxable income, nor treated as reducing the amount realized on such sale or exchange; but so much of such expenditures as does not exceed the portion of gain deemed under paragraph (1) to be gain from the sale of property held primarily for sale to customers in the ordinary course of trade or business shall be so allowed as a deduction, and the remainder, if any, shall be treated as reducing the amount realized on such sale or exchange.
"(c) The provisions of subsections (a) and (b) shall apply to taxable years beginning after December 31, 1957, and before January 1, 1984."
[§1238. Repealed. Pub. L. 101–508, title XI, §11801(a)(35), Nov. 5, 1990, 104 Stat. 1388–521 ]
Section, acts Aug. 16, 1954, ch. 736,
Savings Provision
For provisions that nothing in repeal by
§1239. Gain from sale of depreciable property between certain related taxpayers
(a) Treatment of gain as ordinary income
In the case of a sale or exchange of property, directly or indirectly, between related persons, any gain recognized to the transferor shall be treated as ordinary income if such property is, in the hands of the transferee, of a character which is subject to the allowance for depreciation provided in section 167.
(b) Related persons
For purposes of subsection (a), the term "related persons" means—
(1) a person and all entities which are controlled entities with respect to such person,
(2) a taxpayer and any trust in which such taxpayer (or his spouse) is a beneficiary, unless such beneficiary's interest in the trust is a remote contingent interest (within the meaning of section 318(a)(3)(B)(i)), and
(3) except in the case of a sale or exchange in satisfaction of a pecuniary bequest, an executor of an estate and a beneficiary of such estate.
(c) Controlled entity defined
(1) General rule
For purposes of this section, the term "controlled entity" means, with respect to any person—
(A) a corporation more than 50 percent of the value of the outstanding stock of which is owned (directly or indirectly) by or for such person,
(B) a partnership more than 50 percent of the capital interest or profits interest in which is owned (directly or indirectly) by or for such person, and
(C) any entity which is a related person to such person under paragraph (3), (10), (11), or (12) of section 267(b).
(2) Constructive ownership
For purposes of this section, ownership shall be determined in accordance with rules similar to the rules under section 267(c) (other than paragraph (3) thereof).
(d) Employer and related employee association
For purposes of subsection (a), the term "related person" also includes—
(1) an employer and any person related to the employer (within the meaning of subsection (b)), and
(2) a welfare benefit fund (within the meaning of section 419(e)) which is controlled directly or indirectly by persons referred to in paragraph (1).
(e) Patent applications treated as depreciable property
For purposes of this section, a patent application shall be treated as property which, in the hands of the transferee, is of a character which is subject to the allowance for depreciation provided in section 167.
(Aug. 16, 1954, ch. 736,
Amendments
1997—Subsec. (b)(3).
1986—Subsec. (b)(1).
Subsec. (c).
"(A) the members of an individual's family shall consist only of such individual and such individual's spouse,
"(B) paragraph (2)(C) of section 318(a) shall be applied without regard to the 50-percent limitation contained therein, and
"(C) paragraph (3) of section 318(a) shall not apply."
1984—Subsec. (b).
Subsec. (d).
Subsec. (e).
1983—Subsec. (b).
Subsec. (c)(1).
Subsec. (c)(2).
1980—Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (c).
1978—Subsec. (a).
1976—
Subsec. (a).
Subsec. (b).
Subsec. (c).
1958—Subsec. (c).
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1986 Amendment
"(1)
"(2)
Effective Date of 1984 Amendment
Amendment by section 421(b)(6) of
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1978 Amendment
Effective Date of 1976 Amendment
[§1240. Repealed. Pub. L. 94–455, title XIX, §1901(a)(139), Oct. 4, 1976, 90 Stat. 1787 ]
Section, act Aug. 16, 1954, ch. 736,
Effective Date of Repeal
Repeal applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of
§1241. Cancellation of lease or distributor's agreement
Amounts received by a lessee for the cancellation of a lease, or by a distributor of goods for the cancellation of a distributor's agreement (if the distributor has a substantial capital investment in the distributorship), shall be considered as amounts received in exchange for such lease or agreement.
(Aug. 16, 1954, ch. 736,
§1242. Losses on small business investment company stock
If—
(1) a loss is on stock in a small business investment company operating under the Small Business Investment Act of 1958, and
(2) such loss would (but for this section) be a loss from the sale or exchange of a capital asset,
then such loss shall be treated as an ordinary loss. For purposes of section 172 (relating to the net operating loss deduction) any amount of loss treated by reason of this section as an ordinary loss shall be treated as attributable to a trade or business of the taxpayer.
(Added
References in Text
The Small Business Investment Act of 1958, referred to in cl. (1), is
Amendments
1976—
Effective Date of 1976 Amendment
Amendment by
Effective Date
Section applicable with respect to taxable years beginning after Sept. 2, 1958, see section 57(d) of
§1243. Loss of small business investment company
In the case of a small business investment company operating under the Small Business Investment Act of 1958, if—
(1) a loss is on stock received pursuant to the conversion privilege of convertible debentures acquired pursuant to section 304 of the Small Business Investment Act of 1958, and
(2) such loss would (but for this section) be a loss from the sale or exchange of a capital asset,
then such loss shall be treated as an ordinary loss.
(Added
References in Text
The Small Business Investment Act of 1958, referred to in text, is
Amendments
1976—
1969—Par. (1).
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1969 Amendment
Amendment by
Effective Date
Section applicable with respect to taxable years beginning after Sept. 2, 1958, see section 57(d) of
§1244. Losses on small business stock
(a) General rule
In the case of an individual, a loss on section 1244 stock issued to such individual or to a partnership which would (but for this section) be treated as a loss from the sale or exchange of a capital asset shall, to the extent provided in this section, be treated as an ordinary loss.
(b) Maximum amount for any taxable year
For any taxable year the aggregate amount treated by the taxpayer by reason of this section as an ordinary loss shall not exceed—
(1) $50,000, or
(2) $100,000, in the case of a husband and wife filing a joint return for such year under section 6013.
(c) Section 1244 stock defined
(1) In general
For purposes of this section, the term "section 1244 stock" means stock in a domestic corporation if—
(A) at the time such stock is issued, such corporation was a small business corporation,
(B) such stock was issued by such corporation for money or other property (other than stock and securities), and
(C) such corporation, during the period of its 5 most recent taxable years ending before the date the loss on such stock was sustained, derived more than 50 percent of its aggregate gross receipts from sources other than royalties, rents, dividends, interests, annuities, and sales or exchanges of stocks or securities.
(2) Rules for application of paragraph (1)(C)
(A) Period taken into account with respect to new corporations
For purposes of paragraph (1)(C), if the corporation has not been in existence for 5 taxable years ending before the date the loss on the stock was sustained, there shall be substituted for such 5-year period—
(i) the period of the corporation's taxable years ending before such date, or
(ii) if the corporation has not been in existence for 1 taxable year ending before such date, the period such corporation has been in existence before such date.
(B) Gross receipts from sales of securities
For purposes of paragraph (1)(C), gross receipts from the sales or exchanges of stock or securities shall be taken into account only to the extent of gains therefrom.
(C) Nonapplication where deductions exceed gross income
Paragraph (1)(C) shall not apply with respect to any corporation if, for the period taken into account for purposes of paragraph (1)(C), the amount of the deductions allowed by this chapter (other than by sections 172, 243, and 245) exceeds the amount of gross income.
(3) Small business corporation defined
(A) In general
For purposes of this section, a corporation shall be treated as a small business corporation if the aggregate amount of money and other property received by the corporation for stock, as a contribution to capital, and as paid-in surplus, does not exceed $1,000,000. The determination under the preceding sentence shall be made as of the time of the issuance of the stock in question but shall include amounts received for such stock and for all stock theretofore issued.
(B) Amount taken into account with respect to property
For purposes of subparagraph (A), the amount taken into account with respect to any property other than money shall be the amount equal to the adjusted basis to the corporation of such property for determining gain, reduced by any liability to which the property was subject or which was assumed by the corporation. The determination under the preceding sentence shall be made as of the time the property was received by the corporation.
(d) Special rules
(1) Limitations on amount of ordinary loss
(A) Contributions of property having basis in excess of value
If—
(i) section 1244 stock was issued in exchange for property,
(ii) the basis of such stock in the hands of the taxpayer is determined by reference to the basis in his hands of such property, and
(iii) the adjusted basis (for determining loss) of such property immediately before the exchange exceeded its fair market value at such time,
then in computing the amount of the loss on such stock for purposes of this section the basis of such stock shall be reduced by an amount equal to the excess described in clause (iii).
(B) Increases in basis
In computing the amount of the loss on stock for purposes of this section, any increase in the basis of such stock (through contributions to the capital of the corporation, or otherwise) shall be treated as allocable to stock which is not section 1244 stock.
(2) Recapitalizations, changes in name, etc.
To the extent provided in regulations prescribed by the Secretary, stock in a corporation, the basis of which (in the hands of a taxpayer) is determined in whole or in part by reference to the basis in his hands of stock in such corporation which meets the requirements of subsection (c)(1) (other than subparagraph (C) thereof), or which is received in a reorganization described in section 368(a)(1)(F) in exchange for stock which meets such requirements, shall be treated as meeting such requirements. For purposes of paragraphs (1)(C) and (3)(A) of subsection (c), a successor corporation in a reorganization described in section 368(a)(1)(F) shall be treated as the same corporation as its predecessor.
(3) Relationship to net operating loss deduction
For purposes of section 172 (relating to the net operating loss deduction), any amount of loss treated by reason of this section as an ordinary loss shall be treated as attributable to a trade or business of the taxpayer.
(4) Individual defined
For purposes of this section, the term "individual" does not include a trust or estate.
(e) Regulations
The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.
(Added
Amendments
2014—Subsec. (c)(2)(C).
1984—Subsecs. (c)(1), (d)(2).
1978—Subsec. (b).
Subsec. (c).
Subsec. (d)(2).
1976—Subsecs. (a), (b).
Subsec. (c)(1)(E).
Subsec. (d)(2).
Subsec. (d)(3).
Effective Date of 2014 Amendment
Amendment by
Except as otherwise provided in section 221(a) of
Effective Date of 1984 Amendment
Effective Date of 1978 Amendment
"(1)
"(2)
"(3)
Effective Date of 1976 Amendment
Amendment by section 1901(b)(1)(W), (3)(G) of
§1245. Gain from dispositions of certain depreciable property
(a) General rule
(1) Ordinary income
Except as otherwise provided in this section, if section 1245 property is disposed of the amount by which the lower of—
(A) the recomputed basis of the property, or
(B)(i) in the case of a sale, exchange, or involuntary conversion, the amount realized, or
(ii) in the case of any other disposition, the fair market value of such property,
exceeds the adjusted basis of such property shall be treated as ordinary income. Such gain shall be recognized notwithstanding any other provision of this subtitle.
(2) Recomputed basis
For purposes of this section—
(A) In general
The term "recomputed basis" means, with respect to any property, its adjusted basis recomputed by adding thereto all adjustments reflected in such adjusted basis on account of deductions (whether in respect of the same or other property) allowed or allowable to the taxpayer or to any other person for depreciation or amortization.
(B) Taxpayer may establish amount allowed
For purposes of subparagraph (A), if the taxpayer can establish by adequate records or other sufficient evidence that the amount allowed for depreciation or amortization for any period was less than the amount allowable, the amount added for such period shall be the amount allowed.
(C) Certain deductions treated as amortization
Any deduction allowable under section 179, 179B, 179C, 179D, 179E, 181, 190, 193, or 194 shall be treated as if it were a deduction allowable for amortization.
(3) Section 1245 property
For purposes of this section, the term "section 1245 property" means any property which is or has been property of a character subject to the allowance for depreciation provided in section 167 and is either—
(A) personal property,
(B) other property (not including a building or its structural components) but only if such other property is tangible and has an adjusted basis in which there are reflected adjustments described in paragraph (2) for a period in which such property (or other property)—
(i) was used as an integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services,
(ii) constituted a research facility used in connection with any of the activities referred to in clause (i), or
(iii) constituted a facility used in connection with any of the activities referred to in clause (i) for the bulk storage of fungible commodities (including commodities in a liquid or gaseous state),
(C) so much of any real property (other than any property described in subparagraph (B)) which has an adjusted basis in which there are reflected adjustments for amortization under section 169, 179, 179B, 179C, 179D, 179E, 188 (as in effect before its repeal by the Revenue Reconciliation Act of 1990), 190, 193, or 194 1
(D) a single purpose agricultural or horticultural structure (as defined in section 168(i)(13)),
(E) a storage facility (not including a building or its structural components) used in connection with the distribution of petroleum or any primary product of petroleum, or
(F) any railroad grading or tunnel bore (as defined in section 168(e)(4)).
(b) Exceptions and limitations
(1) Gifts
Subsection (a) shall not apply to a disposition by gift.
(2) Transfers at death
Except as provided in section 691 (relating to income in respect of a decedent), subsection (a) shall not apply to a transfer at death.
(3) Certain tax-free transactions
If the basis of property in the hands of a transferee is determined by reference to its basis in the hands of the transferor by reason of the application of section 332, 351, 361, 721, or 731, then the amount of gain taken into account by the transferor under subsection (a)(1) shall not exceed the amount of gain recognized to the transferor on the transfer of such property (determined without regard to this section). Except as provided in paragraph (6), this paragraph shall not apply to a disposition to an organization (other than a cooperative described in section 521) which is exempt from the tax imposed by this chapter.
(4) Like kind exchanges; involuntary conversions, etc.
If property is disposed of and gain (determined without regard to this section) is not recognized in whole or in part under section 1031 or 1033, then the amount of gain taken into account by the transferor under subsection (a)(1) shall not exceed the sum of—
(A) the amount of gain recognized on such disposition (determined without regard to this section), plus
(B) the fair market value of property acquired which is not section 1245 property and which is not taken into account under subparagraph (A).
(5) Property distributed by a partnership to a partner
(A) In general
For purposes of this section, the basis of section 1245 property distributed by a partnership to a partner shall be deemed to be determined by reference to the adjusted basis of such property to the partnership.
(B) Adjustments added back
In the case of any property described in subparagraph (A), for purposes of computing the recomputed basis of such property the amount of the adjustments added back for periods before the distribution by the partnership shall be—
(i) the amount of the gain to which subsection (a) would have applied if such property had been sold by the partnership immediately before the distribution at its fair market value at such time, reduced by
(ii) the amount of such gain to which section 751(b) applied.
(6) Transfers to tax-exempt organization where property will be used in unrelated business
(A) In general
The second sentence of paragraph (3) shall not apply to a disposition of section 1245 property to an organization described in section 511(a)(2) or 511(b)(2) if, immediately after such disposition, such organization uses such property in an unrelated trade or business (as defined in section 513).
(B) Later change in use
If any property with respect to the disposition of which gain is not recognized by reason of subparagraph (A) ceases to be used in an unrelated trade or business of the organization acquiring such property, such organization shall be treated for purposes of this section as having disposed of such property on the date of such cessation.
(7) Timber property
In determining, under subsection (a)(2), the recomputed basis of property with respect to which a deduction under section 194 was allowed for any taxable year, the taxpayer shall not take into account adjustments under section 194 to the extent such adjustments are attributable to the amortizable basis of the taxpayer acquired before the 10th taxable year preceding the taxable year in which gain with respect to the property is recognized.
(8) Disposition of amortizable section 197 intangibles
(A) In general
If a taxpayer disposes of more than 1 amortizable section 197 intangible (as defined in section 197(c)) in a transaction or a series of related transactions, all such amortizable 197 intangibles shall be treated as 1 section 1245 property for purposes of this section.
(B) Exception
Subparagraph (A) shall not apply to any amortizable section 197 intangible (as so defined) with respect to which the adjusted basis exceeds the fair market value.
(c) Adjustments to basis
The Secretary shall prescribe such regulations as he may deem necessary to provide for adjustments to the basis of property to reflect gain recognized under subsection (a).
(d) Application of section
This section shall apply notwithstanding any other provision of this subtitle.
(Added
References in Text
The Revenue Reconciliation Act of 1990, referred to in subsec. (a)(3)(C), is title XI of
Amendments
2018—Subsec. (a)(3)(C).
2014—Subsec. (a)(2)(C), (3)(C).
2006—Subsec. (a)(2)(C), (3)(C).
2005—Subsec. (a)(2)(C).
Subsec. (a)(3)(C).
Subsec. (b)(3).
Subsec. (b)(5) to (8).
Subsec. (b)(9).
2004—Subsec. (a)(2)(C), (3)(C).
Subsec. (a)(4).
1997—Subsec. (a)(2)(C), (3)(C).
1996—Subsec. (a)(3).
1995—Subsec. (b)(5).
1993—Subsec. (a)(2)(C).
Subsec. (a)(3).
1990—Subsec. (a)(3).
Subsec. (a)(3)(C).
Subsec. (a)(3)(D).
Subsec. (b)(3).
1989—Subsec. (a)(2)(C).
Subsec. (a)(3).
1988—Subsec. (a)(3)(F).
1986—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(5), (6).
1985—Subsec. (a)(5)(A) to (C).
1984—Subsec. (a)(5)(A) to (C).
Subsec. (d)(5)(D).
1983—Subsec. (a)(3)(F).
1981—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(3)(D).
Subsec. (a)(3)(E), (F).
Subsec. (a)(5).
Subsec. (a)(6).
1980—Subsec. (a)(2).
Subsec. (a)(3)(D).
Subsec. (b)(8).
1978—Subsec. (a)(2).
Subsec. (a)(3)(D).
Subsec. (a)(4)(B).
Subsec. (a)(4)(C).
1976—Subsec. (a)(1).
Subsec. (a)(2)(D).
Subsec. (a)(2) foll. (D).
Subsec. (a)(3)(D).
Subsec. (a)(4).
Subsec. (b)(5).
Subsec. (b)(7)(B).
Subsec. (c).
1975—Subsec. (b)(3), (7).
1971—Subsec. (a)(2).
Subsec. (a)(3)(B)(ii), (iii).
Subsec. (a)(3)(D).
1969—Subsec. (a)(2).
Subsec. (a)(3).
1964—Subsec. (a)(2), (3)(C).
Effective Date of 2014 Amendment
Amendment by
Effective Date of 2006 Amendment
Amendment by
Effective Date of 2005 Amendment
Amendment by section 402(a)(6) of
Amendments by section 403(e)(2), (i)(2) of
Amendment by section 1323(b)(1) of
Amendment by section 1331(b)(2) of
Effective Date of 2004 Amendment
Amendment by section 338(b)(5) of
Amendment by section 886(b)(2) of
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1995 Amendment
Amendment by
Effective Date of 1993 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by section 11813(b)(21) of
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Amendment by
Effective Date of 1985 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by sections 201(b), 202(b), and 204(a)–(d) of
Amendment by section 212(d)(2)(F) of
Effective Date of 1980 Amendment
Amendment by
Amendment by
Effective Date of 1978 Amendment
Amendment by section 701(f)(3)(A), (B) of