Internal Revenue Code:Sec. 1033. Involuntary conversions
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Contents |
Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter O - Gain or Loss on Disposition of Property
PART III - COMMON NONTAXABLE EXCHANGES
Statute
Sec. 1033. Involuntary conversions
(a) General rule
If property (as a result of its destruction in whole or in part,
theft, seizure, or requisition or condemnation or threat or
imminence thereof) is compulsorily or involuntarily converted -
(1) Conversion into similar property
Into property similar or related in service or use to the
property so converted, no gain shall be recognized.
(2) Conversion into money
Into money or into property not similar or related in service
or use to the converted property, the gain (if any) shall be
recognized except to the extent hereinafter provided in this
paragraph:
(A) Nonrecognition of gain
If the taxpayer during the period specified in subparagraph
(B), for the purpose of replacing the property so converted,
purchases other property similar or related in service or use
to the property so converted, or purchases stock in the
acquisition of control of a corporation owning such other
property, at the election of the taxpayer the gain shall be
recognized only to the extent that the amount realized upon
such conversion (regardless of whether such amount is received
in one or more taxable years) exceeds the cost of such other
property or such stock. Such election shall be made at such
time and in such manner as the Secretary may by regulations
prescribe. For purposes of this paragraph -
(i) no property or stock acquired before the disposition of
the converted property shall be considered to have been
acquired for the purpose of replacing such converted property
unless held by the taxpayer on the date of such disposition;
and
(ii) the taxpayer shall be considered to have purchased
property or stock only if, but for the provisions of
subsection (b) of this section, the unadjusted basis of such
property or stock would be its cost within the meaning of
section 1012.
(B) Period within which property must be replaced
The period referred to in subparagraph (A) shall be the
period beginning with the date of the disposition of the
converted property, or the earliest date of the threat or
imminence of requisition or condemnation of the converted
property, whichever is the earlier, and ending -
(i) 2 years after the close of the first taxable year in
which any part of the gain upon the conversion is realized,
or
(ii) subject to such terms and conditions as may be
specified by the Secretary, at the close of such later date
as the Secretary may designate on application by the
taxpayer. Such application shall be made at such time and in
such manner as the Secretary may by regulations prescribe.
(C) Time for assessment of deficiency attributable to gain upon
conversion
If a taxpayer has made the election provided in subparagraph
(A), then -
(i) the statutory period for the assessment of any
deficiency, for any taxable year in which any part of the
gain on such conversion is realized, attributable to such
gain shall not expire prior to the expiration of 3 years from
the date the Secretary is notified by the taxpayer (in such
manner as the Secretary may by regulations prescribe) of the
replacement of the converted property or of an intention not
to replace, and
(ii) such deficiency may be assessed before the expiration
of such 3-year period notwithstanding the provisions of
section 6212(c) or the provisions of any other law or rule of
law which would otherwise prevent such assessment.
(D) Time for assessment of other deficiencies attributable to
election
If the election provided in subparagraph (A) is made by the
taxpayer and such other property or such stock was purchased
before the beginning of the last taxable year in which any part
of the gain upon such conversion is realized, any deficiency,
to the extent resulting from such election, for any taxable
year ending before such last taxable year may be assessed
(notwithstanding the provisions of section 6212(c) or 6501 or
the provisions of any other law or rule of law which would
otherwise prevent such assessment) at any time before the
expiration of the period within which a deficiency for such
last taxable year may be assessed.
(E) Definitions
For purposes of this paragraph -
(i) Control
The term ''control'' means the ownership of stock
possessing at least 80 percent of the total combined voting
power of all classes of stock entitled to vote and at least
80 percent of the total number of shares of all other classes
of stock of the corporation.
(ii) Disposition of the converted property
The term ''disposition of the converted property'' means
the destruction, theft, seizure, requisition, or condemnation
of the converted property, or the sale or exchange of such
property under threat or imminence of requisition or
condemnation.
(b) Basis of property acquired through involuntary conversion
(1) Conversions described in subsection (a)(1)
If the property was acquired as the result of a compulsory or
involuntary conversion described in subsection (a)(1), the basis
shall be the same as in the case of the property so converted -
(A) decreased in the amount of any money received by the
taxpayer which was not expended in accordance with the
provisions of law (applicable to the year in which such
conversion was made) determining the taxable status of the gain
or loss upon such conversion, and
(B) increased in the amount of gain or decreased in the
amount of loss to the taxpayer recognized upon such conversion
under the law applicable to the year in which such conversion
was made.
(2) Conversions described in subsection (a)(2)
In the case of property purchased by the taxpayer in a
transaction described in subsection (a)(2) which resulted in the
nonrecognition of any part of the gain realized as the result of
a compulsory or involuntary conversion, the basis shall be the
cost of such property decreased in the amount of the gain not so
recognized; and if the property purchased consists of more than 1
piece of property, the basis determined under this sentence shall
be allocated to the purchased properties in proportion to their
respective costs.
(3) Property held by corporation the stock of which is
replacement property
(A) In general
If the basis of stock in a corporation is decreased under
paragraph (2), an amount equal to such decrease shall also be
applied to reduce the basis of property held by the corporation
at the time the taxpayer acquired control (as defined in
subsection (a)(2)(E)) of such corporation.
(B) Limitation
Subparagraph (A) shall not apply to the extent that it would
(but for this subparagraph) require a reduction in the
aggregate adjusted bases of the property of the corporation
below the taxpayer's adjusted basis of the stock in the
corporation (determined immediately after such basis is
decreased under paragraph (2)).
(C) Allocation of basis reduction
The decrease required under subparagraph (A) shall be
allocated -
(i) first to property which is similar or related in
service or use to the converted property,
(ii) second to depreciable property (as defined in section
1017(b)(3)(B)) not described in clause (i), and
(iii) then to other property.
(D) Special rules
(i) Reduction not to exceed adjusted basis of property
No reduction in the basis of any property under this
paragraph shall exceed the adjusted basis of such property
(determined without regard to such reduction).
(ii) Allocation of reduction among properties
If more than 1 property is described in a clause of
subparagraph (C), the reduction under this paragraph shall be
allocated among such property in proportion to the adjusted
bases of such property (as so determined).
(c) Property sold pursuant to reclamation laws
For purposes of this subtitle, if property lying within an
irrigation project is sold or otherwise disposed of in order to
conform to the acreage limitation provisions of Federal reclamation
laws, such sale or disposition shall be treated as an involuntary
conversion to which this section applies.
(d) Livestock destroyed by disease
For purposes of this subtitle, if livestock are destroyed by or
on account of disease, or are sold or exchanged because of disease,
such destruction or such sale or exchange shall be treated as an
involuntary conversion to which this section applies.
(e) Livestock sold on account of drought, flood, or other
weather-related conditions.
(1) For purposes of this subtitle, the sale or exchange of livestock
(other than poultry) held by a taxpayer for draft, breeding, or
dairy purposes in excess of the number the taxpayer would sell if
he followed his usual business practices shall be treated as an
involuntary conversion to which this section applies if such
livestock are sold or exchanged by the taxpayer solely on account
of drought, flood, or other weather-related conditions.
(2) Extension of replacement period.--
(A) In general.--In the case of drought, flood, or
other weather-related conditions described in paragraph
(1) which result in the area being designated as
eligible for assistance by the Federal Government,
subsection (a)(2)(B) shall be applied with respect to
any converted property by substituting `4 years' for `2
years'.
(B) Further extension by secretary.--The Secretary
may extend on a regional basis the period for
replacement under this section (after the application of
subparagraph (A)) for such additional time as the
Secretary determines appropriate if the weather-related
conditions which resulted in such application continue
for more than 3 years.
(f) Replacement of livestock with other farm property in Certain Cases.
For purposes of subsection (a), if, because of drought, flood,
or other weather-related conditions, or soil contamination
or other environmental contamination, it is not feasible for the
taxpayer to reinvest the proceeds from compulsorily or
involuntarily converted livestock in property similar or related in
use to the livestock so converted, other property (including real
property in the case of soil contamination or other environmental
contamination) used for farming purposes shall be treated as property
similar or related in service or use to the livestock so converted.
(g) Condemnation of real property held for productive use in trade
or business or for investment
(1) Special rule
For purposes of subsection (a), if real property (not including
stock in trade or other property held primarily for sale) held
for productive use in trade or business or for investment is (as
the result of its seizure, requisition, or condemnation, or
threat or imminence thereof) compulsorily or involuntarily
converted, property of a like kind to be held either for
productive use in trade or business or for investment shall be
treated as property similar or related in service or use to the
property so converted.
(2) Limitations
Paragraph (1) shall not apply to the purchase of stock in the
acquisition of control of a corporation described in subsection
(a)(2)(A).
(3) Election to treat outdoor advertising displays as real
property
(A) In general
A taxpayer may elect, at such time and in such manner as the
Secretary may prescribe, to treat property which constitutes an
outdoor advertising display as real property for purposes of
this chapter. The election provided by this subparagraph may
not be made with respect to any property with respect to which
an election under section 179(a) (relating to election to
expense certain depreciable business assets) is in effect.
(B) Election
An election made under subparagraph (A) may not be revoked
without the consent of the Secretary.
(C) Outdoor advertising display
For purposes of this paragraph, the term ''outdoor
advertising display'' means a rigidly assembled sign, display,
or device permanently affixed to the ground or permanently
attached to a building or other inherently permanent structure
constituting, or used for the display of, a commercial or other
advertisement to the public.
(D) Character of replacement property
For purposes of this subsection, an interest in real property
purchased as replacement property for a compulsorily or
involuntarily converted outdoor advertising display defined in
subparagraph (C) (and treated by the taxpayer as real property)
shall be considered property of a like kind as the property
converted without regard to whether the taxpayer's interest in
the replacement property is the same kind of interest the
taxpayer held in the converted property.
(4) Special rule
In the case of a compulsory or involuntary conversion described
in paragraph (1), subsection (a)(2)(B)(i) shall be applied by
substituting ''3 years'' for ''2 years''.
(h) Special rules for property damaged by Presidentially declared
disasters
(1) Principal residences
If the taxpayer's principal residence or any of its contents is
compulsorily or involuntarily converted as a result of a
Presidentially declared disaster -
(A) Treatment of insurance proceeds
(i) Exclusion for unscheduled personal property
No gain shall be recognized by reason of the receipt of any
insurance proceeds for personal property which was part of
such contents and which was not scheduled property for
purposes of such insurance.
(ii) Other proceeds treated as common fund
In the case of any insurance proceeds (not described in
clause (i)) for such residence or contents -
(I) such proceeds shall be treated as received for the
conversion of a single item of property, and
(II) any property which is similar or related in service
or use to the residence so converted (or contents thereof)
shall be treated for purposes of subsection (a)(2) as
property similar or related in service or use to such
single item of property.
(B) Extension of replacement period
Subsection (a)(2)(B) shall be applied with respect to any
property so converted by substituting ''4 years'' for ''2
years''.
(2) Trade or business and investment property
If a taxpayer's property held for productive use in a trade or
business or for investment is compulsorily or involuntarily
converted as a result of a Presidentially declared disaster,
tangible property of a type held for productive use in a trade or
business shall be treated for purposes of subsection (a) as
property similar or related in service or use to the property so
converted.
(3) Presidentially declared disaster
For purposes of this subsection, the term ''Presidentially
declared disaster'' means any disaster which, with respect to the
area in which the property is located, resulted in a subsequent
determination by the President that such area warrants assistance
by the Federal Government under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act.
(4) Principal residence
For purposes of this subsection, the term ''principal
residence'' has the same meaning as when used in section 121,
except that such term shall include a residence not treated as a
principal residence solely because the taxpayer does not own the
residence.
(i) Replacement property must be acquired from unrelated person in
certain cases
(1) In general
If the property which is involuntarily converted is held by a
taxpayer to which this subsection applies, subsection (a) shall
not apply if the replacement property or stock is acquired from a
related person. The preceding sentence shall not apply to the
extent that the related person acquired the replacement property
or stock from an unrelated person during the period applicable
under subsection (a)(2)(B).
(2) Taxpayers to which subsection applies
This subsection shall apply to -
(A) a C corporation,
(B) a partnership in which 1 or more C corporations own,
directly or indirectly (determined in accordance with section
707(b)(3)), more than 50 percent of the capital interest, or
profits interest, in such partnership at the time of the
involuntary conversion, and
(C) any other taxpayer if, with respect to property which is
involuntarily converted during the taxable year, the aggregate
of the amount of realized gain on such property on which there
is realized gain exceeds $100,000.
In the case of a partnership, subparagraph (C) shall apply with
respect to the partnership and with respect to each partner. A
similar rule shall apply in the case of an S corporation and its
shareholders.
(3) Related person
For purposes of this subsection, a person is related to another
person if the person bears a relationship to the other person
described in section 267(b) or 707(b)(1).
(j) Sales or exchanges to implement microwave relocation policy
(1) In general
For purposes of this subtitle, if a taxpayer elects the
application of this subsection to a qualified sale or exchange,
such sale or exchange shall be treated as an involuntary
conversion to which this section applies.
(2) Qualified sale or exchange
For purposes of paragraph (1), the term ''qualified sale or
exchange'' means a sale or exchange before January 1, 2000, which
is certified by the Federal Communications Commission as having
been made by a taxpayer in connection with the relocation of the
taxpayer from the 1850-1990MHz spectrum by reason of the Federal
Communications Commission's reallocation of that spectrum for use
for personal communications services. The Commission shall
transmit copies of certifications under this paragraph to the
Secretary.
(k) Sales or Exchanges Under Certain Hazard Mitigation Programs.--
For purposes of this subtitle, if property is sold or otherwise
transferred to the Federal Government, a State or local government, or
an Indian tribal government to implement hazard mitigation under the
Robert T. Stafford Disaster Relief and Emergency Assistance Act (as in
effect on the date of the enactment of this subsection) or the National
Flood Insurance Act (as in effect on such date), such sale or transfer
shall be treated as an involuntary conversion to which this section
applies.
(l) Cross references
(1) For determination of the period for which the taxpayer
has held property involuntarily converted, see section 1223.
(2) For treatment of gains from involuntary conversions as
capital gains in certain cases, see section 1231(a).
(3) For exclusion from gross income of gain from involuntary
conversion of principal residence, see section 121.
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 303; June 29, 1956, ch. 464,
Sec. 5(a), 70 Stat. 407; Pub. L. 85-866, title I, Sec. 45, 46(a),
Sept. 2, 1958, 72 Stat. 1641; Pub. L. 88-272, title II, Sec.
206(b)(3), Feb. 26, 1964, 78 Stat. 40; Pub. L. 91-172, title IX,
Sec. 915(a), Dec. 30, 1969, 83 Stat. 723; Pub. L. 94-455, title
XIX, Sec. 1901(a)(128), 1906(b)(13)(A), title XXI, Sec. 2127(a),
2140(a), Oct. 4, 1976, 90 Stat. 1785, 1834, 1920, 1932; Pub. L.
95-600, title IV, Sec. 404(c)(4), title V, Sec. 542(a), title VII,
Sec. 703(j)(5), Nov. 6, 1978, 92 Stat. 2870, 2888, 2941; Pub. L.
97-34, title II, Sec. 202(d)(2), Aug. 13, 1981, 95 Stat. 221; Pub.
L. 98-369, div. A, title IV, Sec. 474(r)(24), July 18, 1984, 98
Stat. 844; Pub. L. 101-508, title XI, Sec. 11813(b)(20), Nov. 5,
1990, 104 Stat. 1388-555; Pub. L. 103-66, title XIII, Sec.
13431(a), Aug. 10, 1993, 107 Stat. 567; Pub. L. 104-7, Sec.
3(a)(1), (b)(1), Apr. 11, 1995, 109 Stat. 94, 95; Pub. L. 104-188,
title I, Sec. 1119(a), (b), 1610(a), Aug. 20, 1996, 110 Stat. 1765,
1844; Pub. L. 105-34, title III, Sec. 312(d)(1), (7), title IX,
Sec. 913(b), title X, Sec. 1087(a), Aug. 5, 1997, 111 Stat. 839,
840, 878, 959.)
References in Text
REFERENCES IN TEXT
The Disaster Relief and Emergency Assistance Act, referred to in
subsec. (h)(3), is Pub. L. 93-288, May 22, 1974, 88 Stat. 143, as
amended, known as the Robert T. Stafford Disaster Relief and
Emergency Assistance Act, which is classified principally to
chapter 68 (Sec. 5121 et seq.) of Title 42, The Public Health and
Welfare. For complete classification of this Act to the Code, see
Short Title note set out under section 5121 of Title 42 and Tables.
Miscellaneous
AMENDMENTS
2005 - P.L. 109-73
SEC. 405
Clause (i) of section 1033(a)(2)(B) of the Internal Revenue Code of
1986 shall be applied by substituting ``5 years'' for ``2 years'' with
respect to property in the Hurricane Katrina disaster area which is
compulsorily or involuntarily converted on or after August 25, 2005, by
reason of Hurricane Katrina, but only if substantially all of the use of
the replacement property is in such area.
2005 - Pub. L. 109-7(b). Section 1033 of such Code (relating to
involuntary conversions) is amended by redesignating subsection (k)
as subsection (l) and by inserting after subsection (j) the following
new subsection:
"(k) Sales or Exchanges Under Certain Hazard Mitigation Programs...".
Effective Date.--<<NOTE: 26 USC 1033 note.>> Dispositions of property
under hazard mitigation programs.--The amendments made by subsection (b)
shall apply to sales or other dispositions before, on, or after the
date of the enactment of this Act. Act approved April 15, 2005.
2004 - Pub. L. 108-357, Sec. 311(a). Subsection (f) of
section 1033 (relating to involuntary conversions) is amended--
by inserting ``drought, flood, or other weather-related
conditions, or'' after ``because of'',
by inserting ``in the case of soil contamination or
other environmental contamination'' after ``including real
property'', and
by striking ``Where There Has Been Environmental Contamination''
in the heading and inserting ``in Certain Cases''.
2004 - Pub. L. 108-357, Sec. 311(b). Subsection (e) of section 1033
(relating to involuntary conversions) is amended--
by striking ``Conditions.--For purposes'' and inserting ``Conditions.--
``(1) In general.--For purposes'', and
by adding at the end the new paragraph (2) Extension of replacement period.
EFFECTIVE DATE OF 2004 AMENDMENT
Pub. L. 108-357
Effective Date.--The amendments made by section 311(a)&(b) shall apply
to any taxable year with respect to which the due date (without regard
to extensions) for the return is after December 31, 2002.
1997 - Subsec. (e). Pub. L. 105-34, Sec. 913(b), inserted '',
flood, or other weather-related conditions'' after ''drought'' in
heading and '', flood, or other weather-related conditions'' before
period at end of text.
Subsec. (h)(4). Pub. L. 105-34, Sec. 312(d)(1), substituted
''section 121'' for ''section 1034''.
Subsec. (i). Pub. L. 105-34, Sec. 1087(a), amended heading and
text of subsec. (i) generally. Prior to amendment, text read as
follows:
''(1) In general. - In the case of -
''(A) a C corporation, or
''(B) a partnership in which 1 or more C corporations own,
directly or indirectly (determined in accordance with section
707(b)(3)), more than 50 percent of the capital interest, or
profits interest, in such partnership at the time of the
involuntary conversion,
subsection (a) shall not apply if the replacement property or stock
is acquired from a related person. The preceding sentence shall
not apply to the extent that the related person acquired the
replacement property or stock from an unrelated person during the
period described in subsection (a)(2)(B).
''(2) Related person. - For purposes of this subsection, a person
is related to another person if the person bears a relationship to
the other person described in section 267(b) or 707(b)(1).''
Subsec. (k)(3). Pub. L. 105-34, Sec. 312(d)(7), amended par. (3)
generally. Prior to amendment, par. (3) read as follows: ''For
one-time exclusion from gross income of gain from involuntary
conversion of principal residence by individual who has attained
age 55, see section 121.''
1996 - Subsec. (b). Pub. L. 104-188, Sec. 1610(a), reenacted
heading without change and amended text generally. Prior to
amendment, text read as follows: ''If the property was acquired,
after February 28, 1913, as the result of a compulsory or
involuntary conversion described in subsection (a)(1) or section
112(f)(2) of the Internal Revenue Code of 1939, the basis shall 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 in accordance with the provisions of law (applicable to
the year in which such conversion was made) determining the taxable
status of the gain or loss upon such conversion, and increased in
the amount of gain or decreased in the amount of loss to the
taxpayer recognized upon such conversion under the law applicable
to the year in which such conversion was made. This subsection
shall not apply in respect of property acquired as a result of a
compulsory or involuntary conversion of property used by the
taxpayer as his principal residence if the destruction, theft,
seizure, requisition, or condemnation of such residence, or the
sale or exchange of such residence under threat or imminence
thereof, occurred after December 31, 1950, and before January 1,
1954. In the case of property purchased by the taxpayer in a
transaction described in subsection (a)(3) which resulted in the
nonrecognition of any part of the gain realized as the result of a
compulsory or involuntary conversion, the basis shall be the cost
of such property decreased in the amount of the gain not so
recognized; and if the property purchased consists of more than one
piece of property, the basis determined under this sentence shall
be allocated to the purchased properties in proportion to their
respective costs.''
Subsec. (h). Pub. L. 104-188, Sec. 1119(b)(2), substituted
''property'' for ''principal residences'' in heading.
Subsec. (h)(1). Pub. L. 104-188, Sec. 1119(b)(3), substituted
''Principal residences'' for ''In general'' in heading.
Subsec. (h)(2). Pub. L. 104-188, Sec. 1119(a), added par. (2).
Former par. (2) redesignated (3).
Subsec. (h)(3). Pub. L. 104-188, Sec. 1119(a), (b)(1),
redesignated par. (2) as (3) and substituted ''property'' for
''residence'' before ''is located''. Former par. (3) redesignated
(4).
Subsec. (h)(4). Pub. L. 104-188, Sec. 1119(a), redesignated par.
(3) as (4).
1995 - Subsec. (i). Pub. L. 104-7, Sec. 3(a)(1), added subsec.
(i). Former subsec. (i) redesignated (j).
Subsec. (j). Pub. L. 104-7, Sec. 3(b)(1), added subsec. (j).
Former subsec. (j) redesignated (k).
Pub. L. 104-7, Sec. 3(a)(1), redesignated subsec. (i) as (j).
Subsec. (k). Pub. L. 104-7, Sec. 3(b)(1), redesignated subsec.
(j) as (k).
1993 - Subsecs. (h), (i). Pub. L. 103-66 added subsec. (h) and
redesignated former subsec. (h) as (i).
1990 - Subsec. (g)(3)(A). Pub. L. 101-508 struck out ''with
respect to which the investment credit determined under section
46(a) is or has been claimed or'' after ''to any property''.
1984 - Subsec. (g)(3)(A). Pub. L. 98-369 substituted ''the
investment credit determined under section 46(a)'' for ''the credit
allowed by section 38 (relating to investment in certain
depreciable property)''.
1981 - Subsec. (g)(3)(A). Pub. L. 97-34 substituted ''(relating
to election to expense certain depreciable business assets)'' for
''(relating to additional first-year depreciation allowance for
small business)''.
1978 - Subsec. (a)(2)(A)(ii). Pub. L. 95-600, Sec. 703(j)(5),
substituted ''subsection (b)'' for ''subsection (c)''.
Subsecs. (f), (g). Pub. L. 95-600, Sec. 542(a), added subsec. (f)
and redesignated former subsecs. (f) and (g) as (g) and (h),
respectively.
Subsec. (h). Pub. L. 95-600, Sec. 404(c)(4), 542(a), redesignated
subsec. (g) as (h) and substituted in par. (3) ''one-time
exclusion'' for ''exclusion'' and ''age 55'' for ''age 65''.
1976 - Subsec. (a)(2), (3). Pub. L. 94-455, Sec. 1901(a)(128)(A),
(B), 1906(b)(13)(A), redesignated par. (3) as (2), struck out in
heading ''where disposition occurred after 1950'' after
''Conversion into money'', in provisions preceding subpar. (A)
''and the disposition of the converted property (as defined in
paragraph (2)) occurred after December 31, 1950,'' after ''use to
the converted property,'' and in subpar. (B)(ii) ''or his
delegate'' after ''Secretary'' wherever appearing, and added
subpar. (E). Former par. (2), which related to involuntary
conversions into money where dispositions occurred prior to 1951,
was struck out.
Subsec. (b). Pub. L. 94-455, Sec. 1901(a)(128)(C), (D),
redesignated subsec. (c) as (b) and substituted ''or section
112(f)(2) of the Internal Revenue Code of 1939'' for ''or (2)''.
Former subsec. (b), which related to application of subsec. (a) in
the case of property used by taxpayer as his principal residence,
if the destruction, theft, etc., occurred after 1950 and before
1954, was struck out.
Subsecs. (c) to (e). Pub. L. 94-455, Sec. 1901(a)(128)(C),
redesignated subsecs. (d) to (f) as (c) to (e), respectively.
Former subsec. (c) redesignated (b).
Subsec. (f). Pub. L. 94-455, Sec. 1901(a)(128)(C), (E), (F),
2127(a), 2140(a), redesignated subsec. (g) as (f), in par. (2)
struck out provisions relating to conversion of real property
before Jan. 1, 1958, and substituted reference to subsection
(a)(2)(A) for reference to subsection (a)(3)(A), and added pars.
(3) and (4). Former subsec. (f) redesignated (e).
Subsecs. (g), (h). Pub. L. 94-455, Sec. 1901(a)(128)(C),
redesignated subsec. (h) as (g). Former subsec. (g) redesignated
(f).
1969 - Subsec. (a)(3)(B). Pub. L. 91-172 substituted ''2 years''
for ''one year''.
1964 - Subsec. (h)(3). Pub. L. 88-272 added par. (3).
1958 - Subsec. (a)(2). Pub. L. 85-866, Sec. 45, inserted
provision defining ''control''.
Subsecs. (g), (h). Pub. L. 85-866, Sec. 46(a), added subsec. (g)
and redesignated former subsec. (g) as (h).
1956 - Subsecs. (f), (g). Act June 29, 1956, added subsec. (f)
and redesignated former subsec. (f) as (g).
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by section 312(d)(1), (7) of Pub. L. 105-34 applicable
to sales and exchanges after May 6, 1997, with certain exceptions,
see section 312(d) of Pub. L. 105-34, set out as a note under
section 121 of this title.
Amendment by section 913(b) of Pub. L. 105-34 applicable to sales
and exchanges after Dec. 31, 1996, see section 913(c) of Pub. L.
105-34, set out as a note under section 451 of this title.
Section 1087(b) of Pub. L. 105-34 provided that: ''The amendment
made by this section (amending this section) shall apply to
involuntary conversions occurring after June 8, 1997.''
EFFECTIVE DATE OF 1996 AMENDMENT
Section 1119(d)(1) of Pub. L. 104-188 provided that: ''The
amendments made by this section (amending this section) shall apply
to disasters declared after December 31, 1994, in taxable years
ending after such date.''
Section 1610(b) of Pub. L. 104-188 provided that: ''The amendment
made by this section (amending this section) shall apply to
involuntary conversions occurring after the date of the enactment
of this Act (Aug. 20, 1996).''
EFFECTIVE DATE OF 1995 AMENDMENT
Section 3(a)(2) of Pub. L. 104-7 provided that: ''The amendment
made by paragraph (1) (amending this section) shall apply to
involuntary conversions occurring on or after February 6, 1995.''
Section 3(b)(2) of Pub. L. 104-7 provided that: ''The amendment
made by paragraph (1) (amending this section) shall apply to sales
or exchanges after March 14, 1995.''
EFFECTIVE DATE OF 1993 AMENDMENT
Section 13431(b) of Pub. L. 103-66 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
property compulsorily or involuntarily converted as a result of
disasters for which the determination referred to in section
1033(h)(2) of the Internal Revenue Code of 1986 (as added by this
section) is made on or after September 1, 1991, and to taxable
years ending on or after such date.''
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by Pub. L. 101-508 applicable to property placed in
service after Dec. 31, 1990, but not applicable to any transition
property (as defined in section 49(e) of this title), any property
with respect to which qualified progress expenditures were
previously taken into account under section 46(d) of this title,
and any property described in section 46(b)(2)(C) of this title, as
such sections were in effect on Nov. 4, 1990, see section 11813(c)
of Pub. L. 101-508, set out as a note under section 29 of this
title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-369 applicable to taxable years beginning
after Dec. 31, 1983, and to carrybacks from such years, see section
475(a) of Pub. L. 98-369, set out as a note under section 21 of
this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-34 applicable to property placed in
service after Dec. 31, 1980, in taxable years ending after that
date, see section 209(a) of Pub. L. 97-34, set out as an Effective
Date note under section 168 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by section 404(c)(4) of Pub. L. 95-600 applicable to
sales or exchanges after July 26, 1978, in taxable years ending
after such date, see section 404(d)(1) of Pub. L. 95-600, set out
as a note under section 121 of this title.
Section 542(b) of Pub. L. 95-600 provided that: ''The amendments
made by subsection (a) (amending this section) shall apply with
respect to taxable years beginning after December 31, 1974.''
Amendment by section 703(j)(5) of Pub. L. 95-600 effective on
Oct. 4, 1976, see section 703(r) of Pub. L. 95-600, set out as a
note under section 46 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1901(a)(128) of Pub. L. 94-455 effective for
taxable years beginning after Dec. 31, 1976, see section 1901(d) of
Pub. L. 94-455, set out as a note under section 2 of this title.
Section 2127(b) of Pub. L. 94-455 provided that: ''The amendment
made by this section (amending this section) shall apply to taxable
years beginning after December 31, 1970.''
Section 2140(b) of Pub. L. 94-455, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendment made by this section (amending this section) shall apply
with respect to any disposition of converted property (within the
meaning of section 1033(a)(2) of the Internal Revenue Code of 1986
(formerly I.R.C. 1954)) after December 31, 1974, unless a
condemnation proceeding with respect to such property began before
the date of the enactment of this Act (Oct. 4, 1976).''
EFFECTIVE DATE OF 1969 AMENDMENT
Section 915(b) of Pub. L. 91-172, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendment made by this section (amending this section) shall apply
only if the disposition of the converted property (within the
meaning of section 1033(a)(2) of the Internal Revenue Code of 1986
(formerly I.R.C. 1954)) occurs after the date of the enactment of
this Act (Dec. 30, 1969).''
EFFECTIVE DATE OF 1964 AMENDMENT
Amendment by Pub. L. 88-272 applicable to dispositions after Dec.
31, 1963, in taxable years ending after such date, see section
206(c) of Pub. L. 88-272, set out as an Effective Date note under
section 121 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85-866 applicable to taxable years beginning
after Dec. 31, 1953, and ending after Aug. 16, 1954, see section
1(c)(1) of Pub. L. 85-866, set out as a note under section 165 of
this title.
EFFECTIVE DATE OF 1956 AMENDMENT
Section 5(b) of act June 29, 1956, provided that: ''The amendment
made by this section (amending this section) shall apply with
respect to taxable years ending after December 31, 1955, but only
in the case of sales and exchanges of livestock after December 31,
1955.''
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be
construed to affect treatment of certain transactions occurring,
property acquired, or items of income, loss, deduction, or credit
taken into account prior to Nov. 5, 1990, for purposes of
determining liability for tax for periods ending after Nov. 5,
1990, see section 11821(b) of Pub. L. 101-508, set out as a note
under section 29 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 121, 139, 143, 165, 172,
197, 381, 453, 857, 1016, 1031, 1223, 1245, 1250, 1351, 2032A,
2057, 6212, 6504, 7508A of this title; title 25 sections 1716,
1729, 1754; title 29 sections 1148, 1302.
