Page:United States Statutes at Large Volume 115 Part 1.djvu/102

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115 STAT. 80 PUBLIC LAW 107-16-JUNE 7, 2001 "(iv) stock of a passive foreign investment company unless such company is a qualified electing fund (as defined in section 1295) with respect to the decedent. "(2) FAIR MARKET VALUE LIMITATION.—The adjustments under subsections (b) and (c) shall not increase the basis of any interest in property acquired from the decedent above its fair market value in the hands of the decedent as of the date of the decedent's death. " (3) ALLOCATION RULES.— "(A) IN GENERAL.— The executor shall allocate the adjustments under subsections (b) and (c) on the return required by section 6018. "(B) CHANGES IN ALLOCATION. — Any allocation made pursuant to subparagraph (A) may be changed only as provided by the Secretary. " (4) INFLATION ADJUSTMENT OF BASIS ADJUSTMENT AMOUNTS.— "(A) IN GENERAL. —In the case of decedents dying in a calendar year after 2010, the $1,300,000, $60,000, and $3,000,000 dollar amounts in subsections (b) and (c)(2)(B) shall each be increased by an amount equal to the product of— "(i) such dollar amount, and "(ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting '2009' for '1992' in subparagraph (B) thereof. "(B) ROUNDING.—I f any increase determined under subparagraph (A) is not a multiple of— "(i) $100,000 in the case of the $1,300,000 amount, "(ii) $5,000 in the case of the $60,000 amount, and " (iii) $250,000 in the case of the $3,000,000 amount, such increase shall be rounded to the next lowest multiple thereof " (e) PROPERTY ACQUIRED FROM THE DECEDENT. —For purposes of this section, the following property shall be considered to have been acquired from the decedent: "(1) Property acquired by bequest, devise, or inheritance, or by the decedent's estate from the decedent. "(2) Property transferred by the decedent during his lifetime— "(A) to a qualified revocable trust (as defined in section 645(b)(1)), or "(B) to any other trust with respect to which the decedent reserved the right to make any change in the enjoyment thereof through the exercise of a power to alter, amend, or terminate the trust. "(3) Any other property passing from the decedent by reason of death to the extent that such property passed without consideration. "(f) COORDINATION WITH SECTION 691.— This section shall not apply to property which constitutes a right to receive an item of income in respect of a decedent under section 691. "(g) CERTAIN LIABILITIES DISREGARDED.—