94 STAT. 220
PUBLIC LAW 96-222—APR. 1, 1980 "(B) STOCK ACQUISITION MUST TAKE PLACE NOT LATER THAN 1 YEAR AFTER TRANSFER OF DWELLING UNITS.—Except in the
"By foreclosure."
Ante, p. 219.
92 Stat. 2888. 26 USC 126.
case of an acquisition of stock of a corporation by foreclosure, subparagraph (A) shall apply only if the acquisition of stock occurs not later than 1 year after the date on which the apartments or houses (or leaseholds therein) are transferred by the original seller to the corporation. For purposes of this subparagraph and subparagraph (A), the term 'by foreclosure' means by foreclosure (or by instrument in lieu of foreclosure) of any purchase-money security interest in the stock held by the original seller." (B) Subparagraph (D) of section 216(b)(6) (as redesignated by subparagraph (A) of this paragraph) is amended by adding at the end thereof the following new sentence: "The estate of an original seller shall succeed to, and take into account, the tax treatment of the original seller under this paragraph." (7) AMENDMENTS RELATED TO SECTION 543 OF THE ACT.—
(A) Section 126 (relating to certain cost-sharing payments) is amended by striking out subsections (b) and (c) and inserting in lieu thereof the following: "(b) EXCLUDABLE PORTION.—For purposes of this section— "(1) IN GENERAL.—The term 'excludable portion' means that portion (or all) of a payment made to any person under any program described in subsection (a) which— "(A) is determined by the Secretary of Agriculture to be made primarily for the purpose of conserving soil and water resources, protecting or restoring the environment, improving forests, or providing a habitat for wildlife, and "(B) is determined by the Secretary of the Treasury or his delegate as not increasing substantially the annual income derived from the property. "(2) PAYMENTS NOT CHARGEABLE TO CAPITAL ACCOUNT.—The
term 'excludable portion' does not include that portion of any payment which is properly associated with an amount which is allowable as a deduction for the taxable year in which such amount is paid or incurred. "(c) ELECTION FOR SECTION NOT TO APPLY.—
26 USC 1255.
"(1) IN GENERAL.—The taxpayer may elect not to have this section (and section 1255) apply to any excludable portion (or portion thereof). "(2) MANNER AND TIME FOR MAKING ELECTION.—Any election
under paragraph (1) shall be made in the manner prescribed by the Secretary by regulations and shall be made not later than the due date prescribed by law (including extensions) for filing the return of tax under this chapter for the taxable year in which the payment was received or accrued. "(d) DENIAL OF DOUBLE BENEFITS.—No deduction or credit shall be allowed with respect to any expenditure which is properly associated with any amount excluded from gross income under subsection (a). "(e) BASIS OF PROPERTY NOT INCREASED BY REASON OF EXCLUDABLE
26 USC 1016.
PAYMENTS.—Notwithstanding any provision of section 1016 to the contrary, no adjustment to basis shall be made with respect to property acquired or improved through the use of any payment, to the extent that such adjustment would reflect any amount which is excluded from gross income under subsection (a)."
�
