1977 h ‘2·11*1;E 26.-INTL
- g~_},»·;gst'@_ per ceutum- of the ‘t0t,u1 number ot shares or an
yum- classes ot stock of the corporution. (Feb. Q6, 1926,-.4;, 2"l,_
- 203, 44 (Stat. 12.);- e " t
See ¤ote·i.t‘begl¤nlng_of thie chapter. ·- Se·etious·2#61, 202, aud' 204 Yhereiu "x·ei'erred` to- afe- set out in 5; ou, 933, and 935, respectively, orthxs suppxemenw,1 hue, ‘ 935. Basis of determiui11g.gaiu_or loes, and oso`fcrth.$—(u)' The basie for determining the lguiujor loss from the sale or other digpQg_g_iou_ of property acquired offer February 28, 1913; shall be the cost Hof such property; eicept that-- ( 3 ‘ (1) If the PPOQGYCYU should heya been included in the lust im·euto?3’» thebaeis shall be the laét inventory value thereof. _ t(2) It the pi·operty.was acquired by gift after December 31,` 1920, the basis shall bethe same us it would lu the haudsof the `d0B91'_ or the lust preceding owner by whom it' was 'riot gequired by gift. II the facts necessary to determine such basis are unknown to the ,;douee,' the commlssiouet shall, if posslble, obtaiu such facts from such donor or last preceding owuer, or any other person cognizant j thereof. It the commissioner “Buds lt impossible `to obtulh each facts, the basis,. shall l>e.tl1e‘tei1· lmarket value of ‘ Buch" property us found by the commissioner as of the date or gppmxlmuté dhte ut which, according to the best information that the commissioner is able to- obtain; such property was acquired by such donor or last precedfhg owner; (3) lt the property was acquired After December ·31, 1920, by ` _ a transfer in tl’\18t_(i)th&l' thsmby a transfer in trust by bequest or devise) basis shall be the some as lt would be in the bends of the grantor, increased in the amount of gain or decreaeeeliu the amount ot lm mognamq to th0`gl‘8I1lE01‘·UDOD sueh transfer under the law applicable to the jar in which the transfer was `°made. Theprovisious otothis ·;$urugi·aph shall _ not apply to the acquisition ot such property interests he are $P€¢i¤¢d‘ei¤`¤¤bdiVi8i0¤ (<:))_;or (e) of Section 402 ot. the Bc-:ve·
- uuo. Act ot 1921, or in subdivwou (e) or `(t) ot setétion 302
ot the Reveuuexct of 1924- or in subdivision. (c) o1·_(t) ot sectiou3G2‘ofthi¤·Act;‘ ‘ h ·’ ‘ `. · ._ ‘_ (4) It theproperty was acquired by gift or transfer in trust on or before 31, 1%0, basis shall be the fair mor-’ ket value of-such ent the time of such acquisition; · _ (5) It the icquirod bibequest, devlwjor inheritance, the basis shall be the ful: (market value of suéh pl-ope-my) se thétime ot ¤u& ncquimldou. The provisions ot this para+ ‘ graph shall apply to the ncqumtlou of ouch property luterestb as are lu subdivision ·(c)`_’or (o) otoeectiou 402 ot the Bévexauelet ot 1921,*0: in suhdlvlsiou (te) or ( 1) ot Section 302 of the Revenue Act ot 1924 or in subdivision (c)‘,o1·° (I) of seotlou_302o£wls4et; *2 x _-·. , (8) I! the was acquired-=upon‘ an §(!h&llg0 d&cribed in éubélvlslou (1:), (d), (e),_01• (t-) ot section 293, thebnsis shall be the some as lu the eneeot the property exchanged, de·‘ cmsqlslo the amount ot my `money received by the. taxpayer ‘ end ‘tB¢1”8&SGd·i¤ the amount ot gnlu or decreased iuthe amount of loss to the taxpayer tut was recomlzeq upon such exchange · uooer the law npmiable to the yea.; in which the egclpnnge was made., It the so acquired coueistm in wrt of the type of property permlttm·~by paragrgx (1)·,_` (2), (8), or (4) 9f euhmllvislou (b) ot section % to be received without the recog-· · nition ot gain or lou, and lh part `oi other proiierty, thwasis . provided lu thi; shall beullooeted between the mp! erties (other_tlm¤`mouey) received. and i'ox*_.the purpose of the) allocation there shall be assigned to such other property un; amount equivalent to its mir market; value at the date ot the exchange, This paragraph shall `uot apply to propertji acquired by e corporation by the issuance -lts stook or securities as the eoueideritiiou lu whole or. in perm? truusfer of the property to it; ` ._
\ A rnzvru. REVENUE , -§935 ` (.1) It the property (other than stock or securities- in a cor- ) poration a partyto the reorganization) was acquired after `De- " _ cember ‘31, 1917, by a corporation. in connection with a reor- _ "'. ganization, and immediately after the transfer an interest or controlin such property of 80·per. ceutnm or 'moreremained in. the samepersons or any of them, then the shall be the _ same as it would be in the hands ot the transferor, `i_ncreaSed in the amount of gain or decreased in the amoxm.t of loss recognized to the transferor_upon'sueh transfer under the law applicable to the year inwhich the transfer- was made; Y . “ _. (8) It the. property ‘-(other than stock or securities in a corporation a party to a reorganization) was acquired. after December 31, 1920, by a corporation by thefissuance ot `its stock or securi-ties . in connection with in · tr@ction described in paragraph (4) oi subdivision (h) of section 2% (including, also, cases where part of the consideration for the transfer For such property to the corporation was promrty or money in additiim to such Zstock or securities), then the basis shall be the same as it would be in the h of gthelltransferor, in- __creased in the amount of gain. or decreased in the amount of. loss recognized to the transferor upon such transfer under the ` ‘law applicable to the tyear inlwhich the transfer was'made,;.` " I (9) It the propertyconsists of stock or securities distributed. after December 31, 1923, -to `a‘ taxpayer in connection with a I transaction described as subdivision (c) of section 203, the _ basis in the case of the stock in respect of which the distribu- ` tion was made shall be apportioned, under rules and ¤>€¤l8·‘ tions prescribed by the commissioner with the approval of the Secretary, between such stock and the stock_ or ·` securities axsmnucea; . _ ’ Y » · . » (1_0) It the property was acquired as the man; of a compulsory or inijoluntary mmersasa described in paragraph (5) of subdivision (b`) ot section- 203, the, baslsshall be the same .as- in' the-case of the property so- converted, decreased in the `amount of any money received by the taxpayer which was not expended 1¤`_·¤ee¤¤·osnee with the provisions ot law (applicable to the year in which such conversion was made) deterrnlning the taxable status of the "gain or loss upon such cmversion, and increased in the. amount of- gain or decreased in the - - amount of loss “t0 the taxpayer recognized upon such conversion under the law applicable to the year in which such con; version was made: g _ i . ` _ (11) If —snbstantially_ identical property was acquired after December 31, 1920, in place ot ·stock or securities wjhich were sold or` disposed ot. and in respect ot which loss was not allowjed as e a deduction nnder paragraph (5) of snbglvlsion (a) of section. 214 or paragraph. (4) of subdivision. (a) of section 234 of this 'Act, the Revenue Act ot 1921, or the Revenue Act of 1924, the basis in the case·—oL_t.h( property so acquired ~ shall be the basis in the case ot the stock or securities se sold or' disposed of, except that it the repurchase price was in excess of the sale priceisuch basis shall be increased in the axnonnt ot the diierence, for it the repurchase price was less than the sale price such basis shall. be decreasedin theamonnt of the differehce. . _ H ‘ _ _ — (b)‘ The basis for deterrnining the gain or loss from-the sale "or other disposition ot property acquired before March 1, 1913, K shall be, (A) the cost of- such property ··f(or, ln- the case of such property_ as is described in paragraph (1), (4),01* (5), ·_
ot subdivision (a-), the basis as therein provided), or .(B) the J
Q-fair ‘market value of such property as ot tMarch 1, 1913, whichever is greater. ~In` determiningtthe `fair market value · ot stock in a corporation as ot March 1, 1913, due regard shall be given. to the fair market valne of the assets of the corpora? ·tionasofthat»date._` f I 2- ·2 _` . —(c) The basis upon which depletion, exhaustion,. __wear and l tear, and obsolescence are to Z be . allowed in respect ot any
