1618
26 USC 1231.
PUBLIC LAW 86-866-8EPT. 2, 1958
[72 S T A T.
holder who owns more than 20 percent in value of the outstanding stock of the corporation, would be, property gain I r o m the sale or exchange of which would under any provision of this chapter be considered in whole or in part as gain from the sale or exchange of property which is neither a capital asset nor property described m section 1231(b); "(ii) property used in the trade or business (as defined in paragraph (9)), but only if the unrealized depreciation on all such property on which there is unrealized depreciation exceeds the unrealized appreciation on all such property on which there is unrealized appreciation; "(iii) if there is net unrealized appreciation on all property used in the trade or business (as defined in paragraph (9)), property used in the trade or business (as defined in paragraph (9)) which, in the hands of a shareholder who owns more than 20 percent in value of the outstanding stock of the corporation, would be property gain from the sale or exchange of which would under any provision of this chapter be considered in whole or in part as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b); and " (iv) property (unless included under clause (i), (ii), or (iii)) which consists of a copyright, a literary, musical, or artistic composition, or similar property, or any interest in any such property, if the property was created in whole or in part by the personal efiorts of any individual who owns more than 5 percent in value of the stock of the corporation. The determination as to whether property of the corporation in the hands of the corporation is, or in the hands of a shareholder would be, property gain from the sale or exchange of which would under any provision of this chapter be considered in whole or in part as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231(b) shall be made as if all property of the corporation had been sold or exchanged to one person in one transaction. " (B) For purposes of paragraph (3), the term 'subsection (e) asset' means, with respect to property held by any corporation, property described in clauses (i), (ii), (iii), and (iv) of subparagraph (A), except that clauses (i) and (iii) shall apply in respect of any shareholder who owns more than 5 percent in value of the outstanding stock of the corporation (in lieu of any shareholder who owns more than 20 percent in value of such stock). "(6)
N E T UNREALIZED APPRECIATION DEFINED.—
" (A) For purposes of this subsection, the term 'net unrealized appreciation' means, with respect to the assets of a corporation, the amount by which— "(i) the unrealized appreciation in such assets on which there is unrealized appreciation, exceeds "(ii) the unrealized depreciation in such assets on which there is unrealized depreciation.
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