Page:United States Statutes at Large Volume 72 Part 1.djvu/1661

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[72 Stat. 1619]
[72 Stat. 1619]
PUBLIC LAW 85-000—MMMM. DD, 1958

72 S T A T. ]

PUBLIC LAW 85-866-SEPT. 2, 1958

" (B) For purposes of subparagraph (A) and paragraph (5)(A), the term 'unrealized appreciation' means, with respect to any asset, the amount by which— " (i) the fair market vahie of such asset, exceeds "(ii) the adjusted basis for determining gain from the sale or other disposition of such asset. " (C) For purposes of subparagraph (A) and paragraph (5)(A), the term 'unrealized depreciation' means, with respect to any asset, the amount by which— "(i) the adjusted basis for determining gain from the sale or other disposition of such asset, exceeds " (ii) the fair market value of such asset. " (D) For purposes of this paragraph (but not paragraph (5)(A)), in the case of any asset on the sale or exchange of which only a portion of the gain would under any provision of this chapter be considered as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b), there shall be taken 26 USC 1231. into account only an amount of the unrealized appreciation in such asset which is equal to such portion of the gain. "(7) N E T WORTH DEFINED.—For purposes of this subsection, the net worth of a corporation, as of any day, is the amount by which— " (A)(i) the fair market value of all its assets at the close of such day, plus "(ii) the amount of any distribution in complete liquidation made by it on or before such day, exceeds " (B) all its liabilities at the close of such day. For purposes of this paragraph, the net worth of a corporation as of any day shall not take into account any increase in net worth during the one-year period ending on such day to the extent attributable to any amount received by it for stock, or as a contribution to capital or as paid-in surplus, if it appears that there was not a bona fide business purpose for the transaction in respect of which such amount was received. "(8) RELATED PERSON DEFINED.—For purposes of paragraphs (1) and (4), the following persons shall be considered to be related to a shareholder: " (A) If the shareholder is an individual— " (i) his spouse, ancestors, and lineal descendants, and "(ii) a corporation which is controlled by such shareholder. " (B) If the shareholder is a corporation— " (i) a corporation which controls, or is controlled by, the shareholder, and " (ii) if more than 50 percent in value of the outstanding stock of the shareholder is owned by any person, a corporation more than 50 percent in value of the outstanding stock of which is owned by the same person. For purposes of determining the ownership of stock in applying subparagraphs (A) and (B), the rules of section 267(c) shall apply, except that the family of an individual shall include only his spouse, ancestors, and Imeal descendants. For purposes of this paragraph, control means the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote Or at least 50 percent of the total value of shares of all classes of stock of the corporation. "(9)

PROPERTY USED IN THE TRADE OR BUSINESS.—For purposes

of this subsection, the term 'property used in the trade or business' means property described in section 1231(b), without regard to any holding period therein provided.

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