TRANSITIONAL PROVISIONS FOR INDUSTRIAL DEVELOPMENT BONDS ISSUED BEFORE JANUARY 1, 1969

Section 107(b) (2) of Pub. L. 90-364 provided that: "Section 103 (c) (1) of the Internal Revenue Code of 1954, as amended by subsection (a) [subsec. (c)(1) of this section], shall not apply with respect to any obligation issued before January 1, 1969, if before May 1, 1968"(A) the issuance of the obligation (or the project in connection with which the proceeds of the obligations are to be used) was authorized or approved by the governing body of the governmental unit issuing the obligation or by the voters of such governmental unit;

"(B) in connection with the issuance of such obligation or with the use of the proceeds to be derived from the sale of such obligation or the property to be acquired or improved with such proceeds, a governmental unit has made a significant financial commitment;

"(C) any person (other than a governmental unit) who will use the proceeds to be derived from the sale

of such obligation or the property to be acquired or improved with such proceeds has expended (or has entered into a binding contract to expend) for purposes which are related to the use of such proceeds or property, an amount equal to or in excess of 20 percent of such proceeds; or

"(D) in the case of an obligation issued in conjunction with a project where financial assistance will be provided by a governmental agency concerned with economic development, such agency has approved the project or an application for financial assistance is pending."

Except as otherwise provided in this section, if section 1245 property is disposed of during a taxable year beginning after December 31, 1962, the amount by which the lower of

(A) the recomputed basis of the property, or (B) (i) in the case of a sale, exchange, or involuntary conversion, the amount realized, or

(ii) in the case of any other disposition, the fair market value of such property, exceeds the adjusted basis of such property shall be treated as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231. Such gain shall be recognized notwithstanding any other provision of this subtitle.

(2) Recomputed basis.

For purposes of this section, the term "recomputed basis" means—

(A) with respect to any property referred to in paragraph (3) (A) or (B), its adjusted basis recomputed by adding thereto all adjustments, attributable to periods after December 31, 1961,

(B) with respect to any property referred to in paragraph (3) (C), its adjusted basis recomputed by adding thereto all adjustments, attributable to periods after June 30, 1963,

(C) with respect to livestock, its adjusted basis recomputed by adding thereto all adjustments attributable to periods after December 31, 1969, or

(D) with respect to any property referred to

in paragraph (3) (D), its adjusted basis recomputed by adding thereto all adjustments attributable to periods beginning with the first month for which a deduction for amortization is allowed under section 169 or 185

reflected in such adjusted basis on account of deductions (whether in respect of the same or other property) allowed or allowable to the taxpayer or to any other person for depreciation, or for amortization under section 168, 169, 184, 185, or 187. For purposes of the preceding sentence, if the taxpayer can establish by adequate records or other sufficient evidence that the amount allowed for depreciation, or for amortization under section 168, 169, 184, 185, or 187, for any period was less than the amount allowable, the amount added for such period shall be the amount allowed.

(B) other property (not including a building or its structural components) but only if such other property is tangible and has an adjusted basis in which there are reflected adjustments described in paragraph (2) for a period in which such property (or other property) —

(i) was used as an integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services, or

(ii) constituted research or storage facilities used in connection with any of the activities referred to in clause (i),

(C) an elevator or an escalator, or

(D) so much of any real property (other than any property described in subparagraph (B))

This section shall apply notwithstanding any other provision of this subtitle. (Added Pub. L. 87-834, § 13(a) (1), Oct. 16, 1962, 76 Stat. 1032, and amended Pub. L. 88-272, title II, § 203 (d), Feb. 26, 1964, 78 Stat. 35; Pub. L. 91-172, title II, § 212(a) (1), (2), title VII, § 704(b) (4), Dec. 30, 1969, 83 Stat. 571, 670.)

1969-Subsec.

AMENDMENTS

(a)(2). Pub. L. 91-172, §§ 212(a)(1), 704(b) (4) (A), (B), added subpar. (C) and inserted references to sections 169, 185, and 187, and added subpar. (D). Subsec. (a) (3). Pub. L. 91-172, §§ 212(a) (2), 704(b) (4) (C)-(F), struck out "(other than livestock)" following "means any property" and substituted "section 167 (or subject to the allowance of amortization provided in section 185)" for "section 167" and added subpar. (D).

1964 Subsec. (a)(2), (3) (C). Pub. L. 88-272 redefined "recomputed basis" with respect to elevators or escalators in par. (2), and inserted subpar. (C) in par. (3). EFFECTIVE DATE OF 1969 AMENDMENT

Section 212 (a) (3) of Pub. L. 91-172 provided that: "The amendments made by paragraphs (1) and (2) [to this section] shall apply with respect to taxable years beginning after December 31, 1969."

Amendment of section by section 704(b) (4) of Pub. L. 91-172 applicable to taxable years ending after Dec. 31, 1968, see section 704(c) of Pub. L. 91-172, set out as a note under section 169 of this title.

EFFECTIVE DATE OF 1964 AMENDMENT Amendment of section by Pub. L. 88-272 applicable with respect to dispositions after Dec. 31, 1963, in taxable years ending after such date, see section 203 (f) (3) of Pub. L. 88-272, set out as a note under section 48 of this title.

EFFECTIVE DATE

Section 13(g) of Pub. L. 87-834 provided that: "The amendments made by this section [enacting this section and amending sections 167(e), 170, 301, 312, 341, 453, 613 and 751 of this title] (other than the amendments made by subsection (c) [enacting section 167 (f) of this title, amending sections 179 and 642 of this title, and redesignating former subsecs. (f)-(h) of section 167 of this title as subsecs. (g)-(1)]) shall apply to taxable years beginning after December 31, 1962. The amendments made by subsection (c) shall apply to taxable years beginning after December 31, 1961, and ending after the date of the enactment of this Act [Oct. 16, 1962]."

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 57, 163, 166, 170, 301, 312, 341, 453, 512, 617, 751, 1250, 1251, 1252 of this title.

(A) that portion of the additional depreciation (as defined in subsection (b) (1) or (4)) attributable to periods after December 31, 1969, in respect of the property, or

(B) the excess of

(i) the amount realized (in the case of a sale, exchange, or involuntary conversion), or the fair market value of such property (in the case of any other disposition), over

(ii) the adjusted basis of such property, shall be treated as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231. Such gain shall be recognized notwithstanding any other provision of this subtitle.

(C) Applicable percentage.

For purposes of paragraph (1), the term "applicable percentage" means

(i) in the case of section 1250 property disposed of pursuant to a written contract which was, on July 24, 1969, and at all times thereafter, binding on the owner of the property, 100 percent minus 1 percentage point for each full month the property was held after the date the property was held 20 full months;

(2) Additional depreciation before January 1, 1970. (A) In general.

If section 1250 property is disposed of after December 31, 1963, and the amount determined under paragraph (1)(B) exceeds the amount determined under paragraph (1)(A), then the applicable percentage of the lower of

(i) that portion of the additional depreciation attributable to periods before January 1, 1970, in respect of the property, or

(i) the excess of the amount determined under paragraph (1)(B) over the amount determined under paragraph (1)(A),

shall also be treated as gain from the sale or
exchange of property which is neither a capital
asset nor property described in section 1231.
Such gain shall be recognized notwithstanding
any other provision of this subtitle.
(B) Applicable percentage.

For purposes of subparagraph (A) the term "applicable percentage" means 100 percent minus 1 percentage point for each full month the property was held after the date on which the property was held for 20 full months. (b) Additional depreciation defined. For purposes of this section

(1) In general.

The term "additional depreciation" means, in the case of any property, the depreciation adjustments in respect of such property; except that, in the case of property held more than one year, it means such adjustments only to the extent that they exceed the amount of the depreciation ad

justments which would have resulted if such adjustments had been determined for each taxable year under the straight line method of adjustment. For purposes of the preceding sentence, if a useful life (or salvage value) was used in determining the amount allowed as a deduction for any taxable year, such life (or value) shall be used in determining the depreciation adjustments which would have resulted for such year under the straight line method.

*

(3) Depreciation adjustments.

The term "depreciation adjustments" means, in respect of any property, all adjustments attributable to periods after December 31, 1963, reflected in the adjusted basis of such property on account of deductions (whether in respect of the same or other property) allowed or allowable to the taxpayer or to any other person for exhaustion, wear and tear, obsolescene, or amortization (other than amortization under section 168, 169, or 185). For purposes of the preceding sentence, if the taxpayer can establish by adequate records or other sufficient evidence that the amount allowed as a deduction for any period was less than the amount allowable, the amount taken into account for such period shall be the amount allowed.

(4) Additional depreciation attributable to rehabilitation expenditures.

The term "additional depreciation" also means, in the case of section 1250 property with respect to which a depreciation deduction for rehabilitation expenditures was allowed under section 167(k), the depreciation adjustments allowed under such section to the extent attributable to such property, except that, in the case of such property held for more than one year after the rehabilitation expenditures so allowed were incurred, it means such adjustments only to the extent that they exceed the amount of the depreciation adjustments which would have resulted if such adjustments had been determined under the straight line method of adjustment without regard to the useful life permitted under section 167(k).

(c) Section 1250 property.

For purposes of this section, the term "section 1250 property" means any real property (other than section 1245 property, as defined in section 1245(a) (3)) which is or has been property of a character subject to the allowance for depreciation provided in section 167.

REFERENCES IN TEXT

Section 221 (d) (3) of the National Housing Act, referred to in subsec. (a) (1) (C) (11), is section 221(d) (3) of act June 27, 1934, ch. 847, title II, as amended June 30, 1961, Pub. L. 87-70, 75 Stat. 150, which is classified to section 17151(d)(3) of Title 12, Banks and Banking.

Section 236 of the National Housing Act, referred to in subsec. (a) (1) (C) (ii), is section 236 of act June 27, 1934,

ch. 847, title II as added Aug. 1. 1968, Pub. L. 90-448, 82 Stat. 498, which is classified to section 1715z-1 of Title 12, Banks and Banking.

AMENDMENTS

1969-Subsec. (a). Pub. L. 91-172, § 521 (b), modified the recapture rules pertaining to residential housing by allowing a 1 percent per month reduction in the amount to be recaptured as ordinary income after the property has been held for 100 full months, with other real property remaining subject to full recapture, applied the existing recapture rules where the sale of property was subject to a binding contract in existence prior to July 25, 1969, provided that changes in the recapture rules are not to apply in federally assisted projects (such as programs under section 221 (d) (3) or 236 of the National Housing Act) or to other publicly assisted housing programs under which the return to the investor is limited on a comparable basis, thereby rendering these projects subject to a recapture of the depreciation in full if the sale occurs in the first 12 months and for a phaseout of the recapture of the excess of accelerated over straight-line depreciation after 20 months, the recapture being reduced at the rate of 1 percent per month until 120 months after which no recapture applies, with such recapture rules to continue to apply only with respect to such property constructed, reconstructed, or acquired before Jan. 1, 1975, and applied new recapture rules to depreciation attributable to periods after Dec. 31, 1969.

Subsec. (b). Pub. L. 91-172, § 512(c), added par. (4). Subsec. (b) (3). Pub. L. 91-172, § 704 (b) (5), inserted reference to sections 169 and 185 of this title.

Subsec. (d). Pub. L. 91-172, §§ 521 (e) (1), 910(b) (1), substituted "subsection (a)" for "subsection (a)(1)" wherever it appears and added par. (8).

Subsec. (e). Pub. L. 91-172, § 910(b) (2), added par. (4). Subsec. (f) (1). Pub. L. 91-172, § 521(e) (2) (A), substituted "subsection (a)" for "subsection (a) (1) ".

Subsec. (f) (2). Pub. L. 91-172, § 521 (e) (2) (B), redesignated subpars. (A) and (B) as cls. (1) and (11) of subpar. (A), respectively, and, in such cls. (1) and (11) as so redesignated, added reference to depreciation attributable to periods after Dec. 31, 1969, and added subpar. (B).

Subsec. (g). Pub. L. 91-172, § 910(b) (3), added subsec. (g). Former subsec. (g) redesignated (h).

Subsec. (h). Pub. L. 91-172, § 910(b) (3), redesignated former subsec. (g) as (h). Former subsec. (h) redesignated (1).

Subsec. (1). Pub. L. 91-172, § 910(b) (3), redesignated former subsec. (h) as (1).

EFFECTIVE DATE OF 1969 AMENDMENT Amendment of section by section 521 (b), (c), and (e) of Pub. L. 91-172 applicable with respect to taxable years ending after July 24, 1969, see section 521(g) of Pub. L. 91-172, set out as a note under section 167 of this title. Amendment of section by section 704(b)(5) of Pub. L. 91-172 applicable to taxable years ending after Dec. 31, 1968, see section 704 (c) of Pub. L. 91-172, set out as a note under section 169 of this title.

Amendment of section by section 910(b) of Pub. L. 91– 172 applicable to approved dispositions of qualified housing projects after Oct. 9, 1969, see section 910(d) of Pub. L. 91-172, set out as a note under section 1039 of this title.

EFFECTIVE DATE

Section 231 (c) of Pub. L. 88-272 provided that: "The amendments made by this section [adding this section, and amending section 170, 301, 312, 341, 453 (d) (4), 751, and the analysis preceding section 1231 of this title] shall apply to dispositions after December 31, 1963, in taxable years ending after such date."

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 57, 163, 167, 170, 301, 312, 341, 453, 751 of this title.

§ 1082. Basis for determining gain or loss. (a) Exchanges generally.

(1) Exchanges subject to the provisions of section 1081 (a) or (e).

If the property was acquired on an exchange subject to the provisions of section 1081 (a) or (e), or the corresponding provisions of prior internal revenue laws, the basis shall be the same as in the case of the property exchanged, decreased in the amount of any money received by the taxpayer, and increased in the amount of gain or decreased in the amount of loss to the taxpayer that was recognized on such exchange under the law applicable to the year in which the exchange was made. If the property so acquired consisted in part of the type of property permitted by section 1081 (a) to be received without the recognition of gain or loss, and in part of nonexempt property, the basis provided in this subsection shall be allocated between the properties (other than money) received, and for the purpose of the allocation there shall be assigned to such nonexempt property (other than money) an amount equivalent to its fair market value at the date of the exchange. This subsection shall not apply to property acquired by a corporation by the issuance of its stock or securities as the consideration in whole or in part for the transfer of the property to it.

(2) Exchanges subject to the provisions of section 1081 (b).

The gain not recognized on a transfer by reason of section 1081 (b) or the corresponding provisions of prior internal revenue laws shall be applied to

reduce the basis for determining gain or loss on sale or exchange of the following categories of property in the hands of the transferor immediately after the transfer, and property acquired within 24 months after such transfer by an expenditure or investment to which section 1081 (b) relates on account of the acquisition of which gain is not recognized under such subsection, in the following order:

(A) property of a character subject to the allowance for depreciation under section 167;

(B) property (not described in subparagraph (A)) with respect to which a deduction for amortization is allowable under section 168, 169, 184, 185, or 187;

Sec.

1151. Congressional declaration of policy in controlling water pollution; right of States to waters.

(c)

(d)

(e) (1)

Collection and dissemination of basic data on chemical, physical, and biological water quality.

Municipal sewage and other waterborne wastes; effects of pollutants on water uses; evaluation of effects on water quality and water uses of augmented streamflows.

Field laboratory and research facilities. Waters of the Great Lakes; research and technical development work.

(g) Cooperative agreements for pilot programs of manpower development and training for operation and maintenance of treatment works and related activities; agreements to develop and maintain system for forecasting personnel supply and demand in water pollution programs; grants, contract research fellowships, and programs for training projects; report to Congress; contents.

con

(h) Contracts or grants for developing and demonstrating methods of, and struction of research facilities for, preventing, removing, and controlling pollution in lakes.

(1) Research, studies, experiments, and demonstrations in removal of oil from water and prevention and control of oil pollution; publication of results; authority to contract or grant.

(j) Research, studies, experiments, and demonstrations of human body waste equipment installed on vessels; report to Congress; authority to contract or grant. (k) Acquisition of land and interests therein for demonstration projects, field labo

Sec.

1155. Research investigations, experiments, demonstrations, and studies.-Continued.

1156.

1157.

1158.

ratories, and research facilities; valuation of properties.

(1) Release to States of scientific knowledge of effects from presence of pesticides in water for adoption of standards; pesticides release control study for implementation of standards; report to Congress.

(m) Study of effects of pollution, including sedimentation, in estuaries and estuarine zones of United States on fish and wildlife, sport and commercial fishing; recreation, water supply and water power, and other beneficial purposes; report to the Congress; authorization of appropriations.

(n) Authorization of appropriations.