PUBLIC LAW 98-369—JULY 18, 1984 "(b) TREATMENT OF CAPITAL GAINS AND LOSSES, ETC.—In the case of a life insurance company— "(1) in applying section 1231(a), the term 'property used in the trade or business shall be treated as including only— "(A) property used in carrying on an insurance business, of a character which is subject to the allowance for depreciation provided in section 167, held for more than 1 year, and real property used in carrying on an insurance business, held for more than 1 year, which is not described in section 1231(b)(1)(A), (B), or (C), and "(B) property described in section 1231(b)(2), and "(2) in applying section 1221(2), the reference to property used in trade or business shall be treated as including only property used in carrying on an insurance business. "(c) GAIN ON PROPERTY HELD ON DECEMBER 31, 1958 AND CERTAIN SUBSTITUTED PROPERTY ACQUIRED AFTER 1958.— "(1) PROPERTY HELD ON DECEMBER 31, 1958.—In the case of
property held by the taxpayer on December 31, 1958, if^ "(A) the fair market value of such property on such date exceeds the adjusted basis for determining gain as of such date, and "(B) the taxpayer has been a life insurance company at all times on and after December 31, 1958, the gain on the sale or other disposition of such property shall be treated as an amount (not less than zero) equal to the amount by which the gain (determined without regard to this subsection) exceeds the difference between the fair market value on December 31, 1958, and the adjusted basis for determining gain as of such date. "(2) CERTAIN PROPERTY ACQUIRED AFTER DECEMBER 31, 1958.— In the case of property acquired after December 31, 1958, and having a substituted basis (within the meaning of section 1016(b))— "(A) for purposes of paragraph (1), such property shall be deemed held continuously by the taxpayer since the beginning of the holding period thereof, determined with reference to section 1223, "(B) the fair market value and adjusted basis referred to in paragraph (1) shall be that of that property for which the holding period taken into account includes December 31, 1958, "(C) paragraph (1) shall apply only if the property or propenrties the holding periods of which are taken into account were held only by life insurance companies after December 31, 1958, during the holding periods so taken into account, "(D) the difference between the fair market value and adjusted basis referred to in paragraph (1) shall be reduced (to not less than zero) by the excess of (i) the gain that would have been recognized but for this subsection on all prior sales or dispositions after December 31, 1958, of properties referred to in subparagraph (C), over (ii) the gain which was recognized on such sales or other dispositions, and "(E) the basis of such property shall be determined as if the gain which would have been recognized but for this subsection were recognized gain.
31 194 0 - 86 - 26: QL. 3 Part 1
98 STAT. 753
Post, p. 944.
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