Page:United States Statutes at Large Volume 115 Part 1.djvu/106

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115 STAT. 84 PUBLIC LAW 107-16^JUNE 7, 2001 (A) The table of sections for part I of subchapter B of chapter 68 is amended by adding at the end the following new item: "Sec. 6716. Failure to file information with respect to certain transfers at death and gifts.". (B) The item relating to subpart C in the table of subparts for part II of subchapter A of chapter 61 is amended to read as follows: "Subpart C. Returns relating to transfers during life or at death.". (c) EXCLUSION OF GAIN ON SALE OF PRINCIPAL RESIDENCE MADE AVAILABLE TO HEIR OF DECEDENT IN CERTAIN CASES. —Subsection 26 USC 121. (d) of section 121 (relating to exclusion of gain from sale of principal residence) is amended by adding at the end the following new paragraph: "(9) PROPERTY ACQUIRED FROM A DECEDENT.—The exclusion under this section shall apply to property sold by— "(A) the estate of a decedent, "(B) any individual who acquired such property from the decedent (within the meaning of section 1022), and "(C) a trust which, immediately before the death of the decedent, was a qualified revocable trust (as defined in section 645(b)(1)) established by the decedent, determined by taking into account the ownership and use by the decedent.". (d) TRANSFERS OF APPRECIATED CARRYOVER BASIS PROPERTY To SATISFY PECUNIARY BEQUEST.— (1) IN GENERAL.— Section 1040 (relating to transfer of certain farm, etc., real property) is amended to read as follows: "SEC. 1040. USE OF APPRECIATED CARRYOVER BASIS PROPERTY TO SATISFY PECUNIARY BEQUEST. "(a) IN GENERAL.— If the executor of the estate of any decedent satisfies the right of any person to receive a pecuniary bequest with appreciated property, then gain on such exchange shall be recognized to the estate only to the extent that, on the date of such exchange, the fair market value of such property exceeds such value on the date of death. Regulations. "(b) SIMILAR RuLE FOR CERTAIN TRUSTS.— To the extent provided in regulations prescribed by the Secretary, a rule similar to the rule provided in subsection (a) shall apply where— "(1) by reason of the death of the decedent, a person has a right to receive from a trust a specific dollar amount which is the equivalent of a pecuniary bequest, and "(2) the trustee of a trust satisfies such right with property. "(c) BASIS OF PROPERTY ACQUIRED IN EXCHANGE DESCRIBED IN SUBSECTION (a) OR (b). — The basis of property acquired in an exchange with respect to which gain realized is not recognized by reason of subsection (a) or (b) shall be the basis of such property immediately before the exchange increased by the amount of the gain recognized to the estate or trust on the exchange.". (2) The item relating to section 1040 in the table of sections for part III of subchapter O of chapter 1 is amended to read as follows: " Sec. 1040. Use of appreciated carryover basis property to satisfy pecuniary bequest.". (e) AMENDMENTS RELATED TO CARRYOVER BASIS.—