PUBLIC LAW 96-589—DEC. 24, 1980
94 STAT. 3397
"(1) For basis of property acquired by a corporation through a contribution to its capital, see section 362. "(2) For special rules in the case of contributions of indebtedness, see section 108(e)(6)." SEC. 3. RULES RELATING TO TITLE 11 CASES FOR INDIVIDUALS.
11 USC 101
(a) IN GENERAL.— (1) ADDITION OF RULES.—Chapter 1 (relating to normal taxes
and surtaxes) is amended by adding at the end thereof the following new subchapter: "Subchapter V—Title 11 Cases "Sec. 1398. Rules relating to individuals' title 11 cases. "Sec. 1399. No separate taxable entities for partnerships, corporations, etc. "SEC. 1398. RULES RELATING TO INDIVIDUALS' TITLE 11 CASES. 26 USC 1398. "(a) CASES TO WHICH SECTION APPLIES.—Except as provided in
subsection (b), this section shall apply to any case under chapter 7 (relating to liquidations) or chapter 11 (relating to reorganizations) of title 11 of the United States Code in which the debtor is an individual, n USC 701 et "(b) EXCEPTIONS WHERE CASE Is DISMISSED, ETC.— ^^^•' ^^^^ ^^ *^^"(1) SECTION DOES NOT APPLY WHERE CASE IS DISMISSED.—This
section shall not apply if the case under chapter 7 or 11 of title 11 of the United States Code is dismissed. "(2) SECTION DOES NOT APPLY AT PARTNERSHIP LEVEL.—For
purposes of subsection (a), a partnership shall not be treated as an individual, but the interest in a partnership of a debtor who is an individual shall be taken into account under this section in the same manner as any other interest of the debtor. "(c) COMPUTATION AND PAYMENT OF TAX; ZERO BRACKET AMOUNT.— "(1) COMPUTATION AND PAYMENT OF TAX.—Except as otherwise
provided in this section, the taxable income of the estate shall be computed in the same manner as for an individual. The tax shall be computed on such taxable income and shall be paid by the trustee. "(2) TAX RATES.—The tax on the taxable income of the estate shall be determined under subsection (d) of section 1. "(3) AMOUNT OF ZERO BRACKET AMOUNT.—The amount of the estate's zero bracket amount for the taxable year shall be the same as for a married individual filing a separate return for such year. "(d) TAXABLE YEAR OF DEBTORS.— "(1) GENERAL RULE.—Except as provided in paragraph (2), the
taxable year of the debtor shall be determined without regard to the case under title 11 of the United States Code to which this H USC lOl section applies. ^' ^^9"(2) ELECTION TO TERMINATE DEBTOR'S YEAR WHEN CASE COMMENCES.—
"(A) IN GENERAL.—Notwithstanding section 442, the debtor may (without the approval of the Secretary) elect to treat the debtor's taxable year which includes the commencement date as 2 taxable years— "(i) the first of which ends on the day before the commencement date, and "(ii) the second of which begins on the commencement date. "(B) SPOUSE MAY JOIN IN ELECTION.—In the case of a married individual (within the meaning of section 143), the
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