26 U.S.C. § 1239 — Gain from sale of depreciable property between certain related taxpayers

submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 375 words · no verdicts yet

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A translation hasn’t been published for this section yet. The official text below is complete and authoritative.

the actual law source: uscode.house.gov ↗public domain

(a) Treatment of gain as ordinary income

In the case of a sale or exchange of property, directly or indirectly, between related persons, any gain recognized to the transferor shall be treated as ordinary income if such property is, in the hands of the transferee, of a character which is subject to the allowance for depreciation provided in section 167.

(b) Related persons

For purposes of subsection (a), the term “related persons” means—

(1)

a person and all entities which are controlled entities with respect to such person,

(2)

a taxpayer and any trust in which such taxpayer (or his spouse) is a beneficiary, unless such beneficiary’s interest in the trust is a remote contingent interest (within the meaning of section 318(a)(3)(B)(i)), and

(3)

except in the case of a sale or exchange in satisfaction of a pecuniary bequest, an executor of an estate and a beneficiary of such estate.

(1) General rule

For purposes of this section, the term “controlled entity” means, with respect to any person—

(A)

a corporation more than 50 percent of the value of the outstanding stock of which is owned (directly or indirectly) by or for such person,

(B)

a partnership more than 50 percent of the capital interest or profits interest in which is owned (directly or indirectly) by or for such person, and

(C)

any entity which is a related person to such person under paragraph (3), (10), (11), or (12) of section 267(b).

(2) Constructive ownership

For purposes of this section, ownership shall be determined in accordance with rules similar to the rules under section 267(c) (other than paragraph (3) thereof).

(d) Employer and related employee association

For purposes of subsection (a), the term “related person” also includes—

(1)

an employer and any person related to the employer (within the meaning of subsection (b)), and

(2)

a welfare benefit fund (within the meaning of section 419(e)) which is controlled directly or indirectly by persons referred to in paragraph (1).

(e) Patent applications treated as depreciable property

For purposes of this section, a patent application shall be treated as property which, in the hands of the transferee, is of a character which is subject to the allowance for depreciation provided in section 167.

Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 332; Pub. L. 85–866, title I, § 56, Sept. 2, 1958, 72 Stat. 1645; Pub. L. 94–455, title XXI, § 2129(a), Oct. 4, 1976, 90 Stat. 1922; Pub. L. 95–600, title VII, § 701(v)(1), Nov. 6, 1978, 92 Stat. 2920; Pub. L. 96–471, § 5, Oct. 19, 1980, 94 Stat. 2255; Pub. L. 97–448, title III, § 301, Jan. 12, 1983, 96 Stat. 2397; Pub. L. 98–369, div. A, title I, § 175(a), (b), title IV, § 421(b)(6)(A), title V, § 557(a), July 18, 1984, 98 Stat. 708, 794, 898; Pub. L. 99–514, title VI, § 642(a)(1)(A)–(C), Oct. 22, 1986, 100 Stat. 2283, 2284; Pub. L. 105–34, title XIII, § 1308(b), Aug. 5, 1997, 111 Stat. 1041.)

history & why it existsrecord from the source credit

1954Enacted · Act of Aug. 16, 1954, ch. 736
1958Amended · Pub. L. 85-866 · 72 Stat. 1645
1976Amended · Pub. L. 94-455 · 90 Stat. 1922
1978Amended · Pub. L. 95-600 · 92 Stat. 2920
1980Amended · Pub. L. 96-471 · 94 Stat. 2255
1983Amended · Pub. L. 97-448 · 96 Stat. 2397
1984Amended · Pub. L. 98-369 · 98 Stat. 708, 794, 898
1986Amended · Pub. L. 99-514 · 100 Stat. 2283, 2284
1997Amended · Pub. L. 105-34 · 111 Stat. 1041

A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.

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