90 STAT. 1874
PUBLIC LAW 94-455—OCT. 4, 1976 " (A) the n e t appreciation in value of such property, bears to " (B) the n e t appreciation i n value of all such property. "(2)
SPECIAL RULE FOR PERSONAL OR HOUSEHOLD E F F E C T. — For
purposes of paragraph (1), the basis of any property which is a personal or household effect shall be treated as not greater than the fair market value of such property. " (3) NONRESIDENT NOT CITIZEN.—This
subsection
shall
not
apply to any carryover basis property acquired from any decedent who was ( a t the time of his death) a nonresident not a citizen of the United States. " (e) F U R THE R INCREASE I N BASIS FOR CERTAIN STATE SUCCESSION T A X P A I D BY TRANSFEREE OF PROPERTY. — I f —
" (1) any person acquires appreciated carryover basis property from a decedent, and " (2) such person actually pays an amount of estate, inheritance, legacy, or succession taxes with respect to such property to any State or the District of Columbia for which the estate is not liable, then the basis of such property (after any adjustment under subsection (h), (c), o r (d)) shall be increased by an amount which bears the same ratio to the aggregate amount of all such taxes paid by such person as— " (A) the net appreciation in value of such property, bears to " (B) the fair market value of all property acquired by such person which is subject to such taxes. " (f) SPECIAL RULES AND DEFINITIONS FOR APPLICATION OF SUBSECTIONS (c), (d), AND (e). — " (1) F A I R MARKET VALUE LIMITATION.—The adjustments under
subsections (c), (d), and (e) shall not increase the basis of property above its fair market value. " (2) N E T APPRECIATION.—For purposes of this section, the n e t appreciation in value of any property is the amount by which the fair market value of such property exceeds the adjusted basis of such property immediately before the death of the decedent (as determined after any adjustment under subsection (h)). For purposes of subsection (d), such adjusted basis shall be increased by the amount of any adjustment under subsection (c), and, for purposes of subsection (e), such adjusted basis shall be increased by the amount of any adjustment under subsection (c) or (d). "(3)
Ante, pp. 1846, 1850.
FEDERAL AND STATE ESTATE TAXES.—For purposes of sub-
section (c), the term 'Federal and State estate taxes' means— " (A) the tax imposed by section 2001 or 2101, reduced by the credits against such tax, and " (B) any estate, inheritance, legacy, or succession taxes, for which the estate is liable, actually paid by the estate to any State or the District of Columbia. " (4) CERTAIN 3IARITAL AND CHARITABLE DEDUCTION PROPERTY TREATED AS NOT SUBJECT TO T A X. — For purposes of subsections (c)
26 USC 2055, 2056, 2106.
and (e), property shall be treated as not subject to a tax— " (A) with respect to the tax imposed by section 2001 or 2101, to the extent that a deduction is allowable with respect to such property under section 2055 or 2056 or under section 2106(a)(2), and " (B) with respect to State estate taxes and with respect to the State taxes referred to i n subsection (e)(2), to the extent that such property is not subject to such taxes.
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